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Commodities: Domino's fall where they may as take-and-bake comes into play

Eating out is fast becoming eating in, and Wall Street appears to be taking notice when it comes to prices paid for pizza stocks of late.

August 28, 2017 by S.A. Whitehead — Food Editor, Net World Media Group

Eating out is fast becoming eating in, and Wall Street appears to be taking notice when it comes to the prices paid lately for pizza stocks. And though the large delivery-centered brands like Domino's are, in many ways, already built to serve this stay-at-home trend, it was the smaller take-and-bake brand, Papa Murphy's that really tugged most strongly on the wallets of investors last week.

Meanwhile, pizza commodity prices are all over the place, leaving pizza brand operators with good cause for bad sleep amid the industry's rapid shifts of late. 

Cheese

Cheese prices brought a bright spot to the pizza restaurateur's big picture over the last week; prices for the key ingredient fell more than a dime over the course of the trading week, ending Friday 11 cents down from the previous week's close, at $1.65 on average. 

Wheat

Compared with last week, wheat was mostly lower, too. According to the USDA Market News Service, winter wheat remains sharply oversold from a technical point of view. The long-term commercial outlook for winter wheat remains extremely bearish, according to the service. 

Last week export sales totaled 14.2 million bushels of wheat, with 18.3 million bushels shipped. Overall on the wheat markets, the commodity was mixed last week, but mostly was 1 to 24 cents lower. Kansas City U.S. No. 1 Hard Red Winter wheat, ordinary protein rail bid was 8.75 cents lower to 2.25 cents higher, at $4.075 to $5.215 per bushel. Kansas City U.S. No. 2 Soft Red winter rail bid was not quoted.  

St. Louis truck U.S. No. 2 Soft Red Winter terminal bid was 1 cent lower, at $4.08 to $4.14 per bushel. Minneapolis and Duluth U.S. No. 1 Dark Northern Spring, 14.0 to 14.5 percent protein rail, was 9 3/4 to 24 3/4 cents lower, at $7.30 1/2 to $7.45 1/2 per bushel. Portland U.S. Soft White wheat rail was steady to 5 cents lower, at $4.84 to $5.25 per bushel.

Gasoline and diesel fuel

Natural gas

Natural gas spot price movements were mixed this report week (Wednesday, Aug. 16 to Wednesday, Aug. 23). The Henry Hub spot price rose from $2.89 per million British thermal units last Wednesday to $2.92/MMBtu yesterday. 

At the New York Mercantile Exchange, the September 2017 contract price rose 4 cents from $2.890/MMBtu last Wednesday to $2.928/MMBtu yesterday. 

Net injections to working gas totaled 43 billion cubic feet for the week ending Aug. 18. Working natural gas stocks are 3,125 Bcf, which is 7 percent less than the year-ago level and 1 percent more than the five-year (2012–2016) average for this week. 

The natural gas plant liquids composite price at Mont Belvieu, Texas, rose 8 cents, averaging $7.03/MMBtu for the week ending Aug. 23. The price of natural gasoline, ethane, butane, and isobutane rose 1, 2, 5 and 2 percent, respectively. The price of propane remained flat. 

According to Baker Hughes, for the week ending Friday, Aug. 18, the natural gas rig count increased by one, to 182. The number of oil-directed rigs fell by 5, to 763. The number of miscellaneous rigs increased to one. The total rig count decreased by three, and now stands at 946. 

Pizza company stocks

What a couple of weeks it's been for the (previously) rising-value stock, Domino's. In the past few weeks, the brand has experienced a harrowing backslide.

Between Aug. 18 and Aug. 25, shares rolled back from a closing value of $188.59 to $178.73. If you're counting — and we're sure Domino's is — that's a loss of nearly $10 within five trading days.  

Meanwhile, the three other pizza industry players monitored by this site made gains over the same period, particularly Washington-based take-and-bake brand, Papa Murphy's, which saw a substantial rise in value over the week, perhaps indicating increased investor interest in the "eat-at-home" trend sweeping the restaurant industry. 

While Pizza Hut parent, Yum Brands, saw a 42 cent bump in stock value in last week's trading (ending at $75.83 on Aug. 25), and fellow Louisville-based brand, Papa John's saw a 6 cent rise (ending at $77.38  on Aug. 25), Papa Murphy's catapulted ahead with a $1.21 leap in stock value. The brand ended trading Friday at $5.72, after closing at $4.51 the previous week. 

Photo: iStock

About S.A. Whitehead

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Pizza Marketplace and QSRweb editor Shelly Whitehead is a former newspaper and TV reporter with an affinity for telling stories about the people and innovative thinking behind great brands.