Commodities: Gas, cheese and trading prices play nice with most brands

June 26, 2017 | by S.A. Whitehead

photo istock

Three of the four major pizza chains watched here did well last week in trading, though Papa John's lost value over the week. But even for that brand, there was a slight boost to the operational bottom line in commodities trading last week, since both cheese and gas prices were lower in price. 

Cheese 
The price of cheese continues to drop as we near the end of the month, now having fallen a good 20 cents in commodities trading since the start of June. Friday's closing average was $1.54, compared with $1.74 on June 1. 

Wheat

What pizza restaurateurs made in cheese savings, they likely paid out again for wheat, which moved up the price scale last week. Weekly export sales for all wheat were viewed as bullish and showed a total of 19.9 mb (542,900 mt), all for the 2017–2018 marketing year.  

Kansas City U.S. No. 1 Hard Red Winter, ordinary protein rail bid was 2 1/2 to 3 1/2 cents higher from $4.69 3/4-$6.23 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 6–8 cents higher, from $4.69–$4.81 per bushel. Minneapolis and Duluth U.S. No. 1 Dark Northern Spring, 14.0 to 14.5 percent protein rail, was 28 3/4–66 3/4 cents higher, from $7.81 1/4–$8.24 1/4 per bushel. Portland U.S. Soft White wheat rail was 15 1/4–15 1/2 cents higher, from $4.86 1/4–$5.06 1/4 per bushel.

Gasoline and diesel fuel 

                               Regular     Mid-Grade    Premium    Diesel
Current Avg.           $2.262       $2.566         $2.812        $2.453
Yesterday Avg.       $2.265       $2.568         $2.814        $2.456
Week Ago Avg.      $2.293       $2.594         $2.839        $2.474
Month Ago Avg.     $2.374       $2.649         $2.894        $2.511
Year Ago Avg.       $2.308       $2.569         $2.802        $2.374

Natural gas 

Natural gas spot prices rose at most locations this report week (June 14 to June 21). However, the Henry Hub spot price fell from $2.90/MMBtu last Wednesday to $2.88/MMBtu yesterday.

At the New York Mercantile Exchange, the July 2017 contract price fell 4 cents, from $2.933/MMBtu last Wednesday to $2.893/MMBtu yesterday.
Net injections to working gas totaled 61 billion cubic feet for the week ending June 16. Working natural gas stocks are 2,770 Bcf, which is 10 percent less than the year-ago level and 8 percent more than the five-year (2012-16) average for this week.

The natural gas plant liquids composite price at Mont Belvieu, Texas, fell by 10 cents, averaging $5.64/MMBtu for the week ending June 21. The price of natural gasoline, ethane, butane, and isobutane all fell by 2 percent, while the price of propane fell by 1 percent.

According to Baker Hughes, for the week ending Friday, June 16, the natural gas rig count increased by 1 to 186, which is 100 rigs more than last year at this time. The number of oil-directed rigs rose by 6 to 747. The total rig count now stands at 933.

Pizza company stocks 

All but one of the major pizza stocks monitored by this site fared relatively well over last week's trading. Only Papa John's waned in value over the five trading days. 

Domino's marched forward, gaining $2.53 in overall price over the trading week to finish Friday at $217.05, compared with $215.58 at the previous Friday's close. Multibrand giant and Pizza Hut parent Yum Brands also gained over the week's transactions. At the close on Friday, Yum went for $74.82, compared with $73.94 the previous Friday at the close. 

But fellow Louisville-based brand Papa John's did not fare as well, dropping to $73.96 on Friday at the close. That's down 81 cents from the previous Friday's close of $74.47.

Papa Murphy's fared better and actually gained value over the trading week, up 24 cents from the previous Friday's close to end the week at $4.29. 

Photo: iStock

 


Topics: Business Strategy and Profitability, Cheese, Dough, Financial News, Food & Beverage


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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