Article

Commodities: Fuel prices fire up, most stocks slide down

Fuel continued to push up in value, while most pizza brands tracked on this site trended down.

October 15, 2018

Firing up those gas-powered ovens and delivering pies to customers got pricier last week, thanks to seemingly endlessly soaring prices for both vehicle fuels and natural gas. Likewise, most of the pizza brands tracked by this website took it on the chin last week on the trading floors, where all but Papa John's lost value last week. 

Cheese

Barrels closed at $1.36, while 40-pound blocks ended up at $1.61. The weekly average for barrels was $1.3660 (off .0225) and blocks, $1.6510 (off .0395).

The block over barrel price rift of the previous week has not settled much, though barrel prices are mainly steady and blocks' have come down slightly. But, the gap remained sizeable through the week, according to the U.S.D.A. Agricultural Marketing Service. 

Current demand reports are steady to positive nationwide, but cheesemakers expect purchasers to grow more reluctant as buyers await potential price drops. Northeastern inventories are mixed, as mozzarella and cheddar orders are steady to strong. Barrel inventories remain long in the Midwest, but not overly burdensome. Milk is still regionally variant, but mostly tight. 

Wheat

Compared to last week, cash bids for wheat were mixed.  Weather played a significant factor in harvest progress again this week, including snow in the Dakotas and Nebraska to flooding in the Missouri and Texas, while hurricane Michael wreaked havoc in the Southeast. 

Kansas City U.S. No. 1 Hard Red Winter, ordinary protein rail bid was 111/2 cents higher, from $5.98 3/4-$6.13 3/4 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 cents lower, from $4.69-$5.08 per bushel. Minneapolis and Duluth U.S. No. 1 Dark Northern Spring, 14.0 to 14.5 percent protein rail, was 1/4 cent lower, from $6.69 1/2 -$6.94 1/2 per bushel.  Portland U.S. Soft White wheat rail was steady to 1 cent higher, from $6.00-$6.18 per bushel.

Vehicle fuel

According to the American Automobile Association, oil production has hit an all-time high and gas prices have fallen slightly from last week. But fuel prices overall are still higher than this time last month, keeping the price of that increasingly popular delivery significant. 

Regular came in at $2.89 today, down 2 cents from a week ago, but still 4 cents higher than last month and a very significant 42 cents a gallon more than this time last year. That trend held true across mid-grade ($3.19 today) and premium ($3.44), but the price of diesel has soared over the last month. 

Today diesel ran $3.30 a gallon, up 12 cents from last month and 57 cents a gallon over last year at this time. Meanwhile, E85 averaged $2.44 today, up 2 cents from last month and 35 cents higher than last year at this time. 

Natural gas

Firing up the ovens got pricier this past week as natural gas spot price movements rose at most locations for the seven days ending Wednesday, Oct. 10. Henry Hub spot prices rose from $3.26 per million British thermal units (MMBtu) to $3.37/MMBtu over that period.

At the New York Mercantile Exchange (Nymex), the November 2018 contract price rose 5 cents from $3.230/MMBtu last Wednesday to $3.284/MMBtu yesterday. Net injections to working gas totaled 90 billion cubic feet (Bcf) for the week ending Oct. 5. Working natural gas stocks are 2,956 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 73 cents, averaging $10.07/MMBtu for the week ending Oct. 10. The price of natural gasoline, ethane, propane, butane, and isobutane fell by 1, 16, 3, 6 and 7 percent, respectively.

According to Baker Hughes, for the week ending Tuesday, Oct. 2, the natural gas rig count remained flat at 189. The number of oil-directed rigs fell by two to 861. The total rig count decreased by two, and now stands at 1,052.

Pizza company stocks

All but one of the brands followed weekly by this site got pretty beat up by investors last week. Papa John's was the exception ending the week at $52.91, up from $50.36.

Domino's, Pizza Hut and Papa Murphy's lost value. In Domino's case, the closing price Friday was $277.34, down from $292.98 the previous week's close. 

Pizza Hut parent, Yum Brands, also got punched back by investors as that stock closed at $88.05 Friday, down $1.95 from the previous week's close. Smaller take-and-bake brand Papa Murphy's also took a hit on the Nasdaq last week, closing Friday at $4.82, down 26 cents from the previous week's close of $5.08. 
 

Photo: iStock