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Commodities: Fairly flat week, except for Papa John's stock price tumble

Great gas prices continued to turn frowns upside down for delivery-centered pizza brands across the U.S., but it was likely not enough to erase the worry caused by a relatively steep tumble in trading price over the week for Papa John's.

June 24, 2019

Great gas prices continued to turn frowns upside down for delivery-centered pizza brands across the U.S., but it was likely not enough to erase the worry caused by a relatively steep tumble in trading price over the week for Papa John's. Domino's also slipped, but not nearly as dramatically as its Louisville, Kentucky-based competitor. 

Cheese

Cheese production is at full speed now, according to the U.S.D.A. Dairy Market News, with more milk supplies and active production adding to inventories which U.S.D.A. contacts report are less abundant than they have been. 

Block prices have remained strong, continuing their bullish trajectory, while barrels have vacillated since early May. This week, however, barrels gained some on block prices and tightened the large price gap, while also broaching $1.70 for the first time in over five weeks. 

Buying interest has steadied and/or improved across the country, with market tones put at "cautiously optimistic" for cheese producers. Friday's closing price on the Chicago Mercantile Exchange for barrels was $1.74, compared to $1.61 last week, while CME blocks' closing price was $1.83, compared to $1.78 the previous Friday.

Wheat

Wheat prices were unchanged to 38 cents lower last week, according to the U.S.D.A. Missouri Department of Agriculture Market News. 
Kansas City U.S. No. 1 Hard Red Winter, ordinary protein rail bid was 2 3/4 cents lower, from $5.65 1/2-$5.75 1/2 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 10 to 13 cents lower, from $5.58-$5.62 per bushel.  Minneapolis and Duluth U.S. No. 1 Dark Northern Spring, 14.0 to 14.5 percent protein rail, was 38 cents lower, from $6.38 1/4-$6.43 1/4 per bushel. Portland U.S. Soft White wheat rail was steady to 10 cents higher, from $5.75-$6.30 per bushel.

Vehicle fuel

Demand is up, but pump prices are low, according to the American Automobile Association. U.S. Energy Information Administration (EIA), reported that for the week that ended June 14, the administration's data showed that demand for gas hit its highest-recorded point since the agency began publishing such information back in 1991. 

Still, domestic crude prices have dropped to their lowest point this year recently, so gas prices around the country have dropped. The price of crude comprises approximately 60% of the costs consumers pay and most recently the average price for a gallon of regular was $2.66, according to AAA. For some perspective, that 19 cents lower than both a month and a year ago. 

Mid-grade ($3) and Premium ($3.25) followed the same type of arc, though not as steep, with both mid-grade and premium 16 cents lower than last month. Diesel ($2.99) and E85) $2.34 were both down steeply from last month, though not as much as the gasoline grades. 

Natural gas

Natural gas spot price movements were mixed for the report week ending last Wednesday, June 19. Henry Hub spot prices remained flat at $2.36 per million British thermal units (MMBtu).

At the New York Mercantile Exchange, the price of the July 2019 contract decreased 11 cents, from $2.386/MMBtu to $2.276/MMBtu over that period. The price of the 12-month strip averaging July 2019 through June 2020 futures contracts declined 9 cents/MMBtu to $2.442/MMBtu.

Net injections to working gas totaled 115 billion cubic feet (Bcf) for the week ending June 14. Working natural gas stocks are 2,203 Bcf, which is 10% more than the year-ago level and 8% lower than the five-year (2014-18) average for the week.

The natural gas plant liquids composite price at Mont Belvieu, Texas, fell by 12 cents/MMBtu, averaging $4.20/MMBtu for the week ending June 19. The price of ethane, propane, and butane fell by 6, 5 and 1%, respectively. The price of natural gasoline and isobutane rose by 1 and 2%, respectively.

According to Baker Hughes, for the week ending Tuesday, June 11, the natural gas rig count decreased by five to 181. The number of oil-directed rigs fell by one to 788. The total rig count decreased by six, and it now stands at 969.

Publicly traded large pizza company stocks

The story last week revolves around Papa John's International, which saw a relatively significant $6.37 slip in its stock price over the week to settle in at the close Friday at $44.37. Domino's Pizza, Inc. also experienced a less costly decrease last week, falling from $280.65 the previous week's close to $280.33 this past Friday. 

The sole gainer on the week of the Big Three, was Pizza Hut parent company, Yum Brands, which closed up 48 cents at 110.27, though some of that gain may have been due to promotions at sister brands, KFC and Taco Bell. 

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