Article

Commodities: Domino's gets in a 'fall' mood, down $25+ in 2 weeks

The calendar says fall and most pizza stocks did, with little relief on the commodities price front as well.

October 22, 2018 by S.A. Whitehead — Food Editor, Net World Media Group

The calendar says fall and most pizza stocks did just that over the last week, particularly Domino's which has lost a substantial chunk of investors' change over the last two weeks. And there wasn't much relief on the commodities market either for pizza restaurateurs, with most operational essentials showing little in the way of any substantial price breaks this autumn. 

Cheese

Barrels closed at $1.2675 and 40-pound blocks at $1.4975. The weekly average for barrels was $1.2990 (off .0670) and blocks, $1.5675 (off .0835).

Cheese makers nationwide are concerned about cheese markets, according to the U.S. Department of Agriculture. The large block over barrel price gap had several contacts expecting an upward price movement on the barrel side in order for prices to find their comfort zone, the agency said. That potential was not realized last week, as the gap remains large between the two and both barrel and block prices slid throughout the week. 

Milk availability is shifting up in the coastal regions, while Midwestern milk access is still limited. Midwestern cheese makers reported using heavier amounts of nonfat dry milk to fortify. Barrel inventories are plentiful, while a number of block makers suggest cheese is moving well and inventories are balanced.

Some producers are attempting to build on their inventory as milk supplies have become more accessible. Overall, demand has ebbed slightly, as the food service demand has settled a bit and some buyers wait out further declines. 

Wheat

Compared to last week, cash bids for wheat were mixed, with Kansas City U.S. No. 1 Hard Red Winter, ordinary protein rail bid one cent higher, from $5.99 3/4-$6.14 3/4 per bushel. But, Minneapolis and Duluth U.S. No. 1 Dark Northern Spring, 14.0 to 14.5 percent protein rail, was 9 1/2 to 34 1/2 cents lower, at $6.60 per bushel.  

St. Louis truck U.S. No. 2 Soft Red Winter terminal bid was 4 to 5 cents higher, from $4.73-$5.13 per bushel. Portland U.S. Soft White wheat rail was steady to 7 cents higher, from $6.00-$6.25 per bushel.

Vehicle fuel

As domestic crude inventories continue to grow, the price of gas has stayed fairly steady, according to AAA. However, the price of diesel continues to rise, while E85 has fallen slightly over the last month. This morning the price of a gallon of regular was, on average, $2.85, the same as a month ago. Mid-grade and premium followed suit, though diesel prices have increased 10 cents over the last month, from $3.19 to $3.29 today. E85 fuel fell a couple of cents over the last month to settle in today around $2.41 on average. 

Natural gas

Although natural gas spot prices rose at most locations for the report week that ended Wednesday, Oct. 17, Henry Hub spot prices fell from $3.37 per million British thermal units (MMBtu) to $3.31/MMBtu over the same period, according to the U.S. Energy Information Administration. 

At the New York Mercantile Exchange, the November 2018 contract price rose 4 cents from $3.284/MMBtu to $3.320/MMBtu over that period. Net injections to working gas totaled 81 billion cubic feet (Bcf) for the week ending Oct. 12. Working natural gas stocks are 3,037 Bcf, which is 17 percent lower than the year-ago level and 17 percent lower than the five-year (2013-17) average for this week.

The natural gas plant liquids composite price at Mont Belvieu, Texas, fell by 85 cents, averaging $9.22/MMBtu for the week ending Oct. 17. The price of natural gasoline, ethane, propane, butane, and isobutane all fell, by 6, 14, 6, 9 and 9 percent, respectively.

According to Baker Hughes, for the week ending Tuesday, October 9, the natural gas rig count increased by 4 to 193. The number of oil-directed rigs rose by 8 to 869. The total rig count increased by 11, and it now stands at 1,063, the highest level since March 2015.

Pizza company stocks

The story on the stock market last week for the pizza industry was the continuation of a value slide for dominant brand, Domino's. Friday, the brand closed at $267.75, down $9.59 from the previous week and a breathtaking $25.23 from two weeks ago. 

Meantime, competitor Pizza Hut was the only brand monitored by this site last week to actually gain in value, with parent company Yum Brands closing Friday at $89.40, up from $88.05 the previous week. And the controversy-plagued Papa John's also lost a bit of value on the Nasdaq last week, closing Friday at $52.44, down 47 cents from the previous week's close. 

Also on the Nasdaq, Papa Murphy's fell slightly, closing the week at $4.73, down 9 cents from the previous week's close of $4.82. 
 

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.