Commodities: Down, down, down … for all but Domino's

Dec. 26, 2016 | by S.A. Whitehead

Commodities traders were invoking Johnny Cash's lyrics during trading in the week before Christmas, as prices on all pizza chain commodities except auto fuel went "down, down, down," along with the value of most pizza stocks monitored by this site. 
 

Cheese

After rebounding the previous week, cheese prices continued the overall decline since November, falling to an average of $1.69 when trading closed last Friday. Just a month earlier, the price paid for this same pizza essential was almost a quarter more, at $1.92 on Nov. 22.

Wheat
Compared to last week, grain traded mostly lower. The USDA grain market monitoring program said that as the end of the year edges closer, trading volume continues to be thin with traders finding little reason to be active in the market until after the holidays.  

Weekly export sales and shipments for wheat totaled 10.9 and 15.1 mb, respectively, which are bearish amounts. Wheat was mostly 4 to 33 cents lower. Kansas City U.S. No. 1 Hard Red Winter ordinary protein rail bid was 4 3/4 cents lower to 1/4 cent higher from $4.10 to $4.98 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 18 to 20 cents lower from $3.82 to $3.84 per bushel. Minneapolis and Duluth U.S. No. 1 Dark Northern Spring, 14.0 to 14.5 percent protein rail, was 18 to 33 cents lower from $6.50 to $6.70 per bushel. Portland U.S. Soft White wheat rail was 5 1/4 to 12 1/4 cents lower from $4.42 to $4.55 per bushel.

Gasoline and diesel fuel

Auto fuel was the one exception to the pizza commodities market's overall downward trend. In fact, Santa's oft' noted "ho, ho, ho" may be less about the joy the old fella feels this time of year, than the "hole" that gas prices are burning in his pocket as suppliers jack up prices for the holiday travel season. This holiday has been no exception, with the price of regular this morning at $2.29 on average. That's up 4 cents from last week and 16 cents from just a month ago. 

To rub salt in the wound, all those prices are trending much higher than what consumers paid last year at the pump during the holidays. For instance, regular fuel last Christmas fetched about $2 on average, while mid-grade, premium and diesel came in at $2.28, $2.51 and $2.28, respectively. This year's prices are up more than a quarter a gallon for all three gas grades, and a full 19 cents higher from last year's price for diesel fuel. 

Natural gas
Prices declined nationwide for the week of Dec. 14 to Dec. 21. The Henry Hub spot price fell 4 cents, from $3.52/MMBtu last Wednesday to $3.48/MMBtu yesterday. Prices generally decreased across all regions as the week's temperatures recovered from the polar vortex conditions, which supported price increases the previous week. 

Supply remains flat, according to data from PointLogic, which said the average total supply of natural gas remained the same as the previous report week, averaging 77.4 Bcf/d. Dry natural gas production decreased by 1 percent, compared with the previous report week. Average net imports from Canada increased by 18 percent from last week.

Total U.S. consumption of natural gas rose by 11 percent compared with the previous report week, according to data from PointLogic. Power burn climbed by 10 percent week over week, while industrial sector consumption increased by 3 percent. In the residential/commercial sector, consumption increased by 15 percent.

Pizza company stocks
Domino's was the sole winner in trading last week among the four brands monitored by this site. Domino's value at the close of trading was $161.57, up from the opening of trade on Monday when the stock was trading at $160.21. 

Meanwhile, Pizza Hut parent Yum Brands finished the week down, like the two other brands monitored by this site. Yum closed at $63.81, down from $64.35 at the open on Monday, while Papa John's fell over the course of the week to close at $86.98. That's a significant drop from the week's opening value for Papa John's, which was $89.14. 

Finally, Papa Murphy's stayed essentially unchanged over the course of the week, to close at $4.49 Friday, up a penny from trading's start last Monday. 

Photo source: iStock


Topics: Business Strategy and Profitability, Financial News


S.A. Whitehead / Award-winning veteran print and broadcast journalist, Shelly Whitehead, has spent most of the last 30 years reporting for TV and newspapers, including the former Kentucky and Cincinnati Post and a number of network news affiliates nationally. She brings her cumulative experience as a multimedia storyteller and video producer to the web-based pages of Pizzamarketplace.com and QSRweb.com after a lifelong “love affair” with reporting the stories behind the businesses that make our world go ‘round. Ms. Whitehead is driven to find and share news of the many professional passions people take to work with them every day in the pizza and quick-service restaurant industry. She is particularly interested in the growing role of sustainable agriculture and nutrition in food service worldwide and is always ready to move on great story ideas and news tips.

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