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Commodities: Gas prices under $2 in 9 states

There was plenty to be jolly about in last week's commodity prices for pizza operators, including under-$2 gas in nine states. But that same cheer failed to spread across brands monitored by Pizza Marketplace, with only half increasing in value in trading over the short week.

December 31, 2018 by S.A. Whitehead — Food Editor, Net World Media Group

Most pizza brands this site follows had a pretty darn nice holiday week, with commodity prices on the downswing in value and higher stock values for half of the four publicly traded brands watched here. But the big news was the price of gas, which dropped below $2 in nine states, making those increasing delivery orders more profitable.

Cheese

Barrels closed at $1.29, while 40-pound blocks closed at $1.43, according to the U.S.D.A. Agricultural Marketing Service. The weekly average for barrels was $1.29 (down nearly 3 cents) and blocks averaged $1.37 (down .03 cents).
As milk bottlers and other processors took on less milk nationally, cheese production was very active. But cheddar and curd producers reported slow demand at the end of the year, though mozzarella and provolone producers remained fairly busy. 

Western U.S.D.A. contacts suggested that cheese inventories were slower to decline last week than in previous years' winter holiday weeks. As such, cheese markets are cloudy heading into the new year. 

Wheat

Compared to the previous week, cash bids for wheat were mostly lower, with the U.S.D.A. reporting that prices were steady to 15 3/4 lower last week.   

Kansas City U.S. No. 1 Hard Red Winter, ordinary protein rail bid was 14 1/2 cents lower, from $6.05-$6.20 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 14 cents lower at $5.42 per bushel. Minneapolis and Duluth U.S. No. 1 Dark Northern Spring, 14.0 to 14.5 percent protein rail, was 15 3/4 cents lower, from $6.22 1/4-$6.67 1/4 per bushel. Portland U.S. Soft White wheat rail was steady from $6.15-$6.30 per bushel. 

Vehicle fuel

Gas prices dropped under the $2 mark in nine states nationally last week, according to AAA. The auto club reported that nationwide, gas price averages have fallen 83 of the last 90 days, with the national average now at $2.27 a gallon, down 5 cents from the previous week and 22 cents from a month and year earlier. 

The nine states with the low prices include Missouri ($1.87), Oklahoma ($1.95), Arkansas ($1.97), South Carolina ($1.97), Texas ($1.97), Alabama ($1.97), Mississippi ($1.97), Louisiana ($1.98) and Kansas ($1.99), AAA said.

Higher grades of gas followed the price trend set by unleaded regular, with mid-grade averaging $2.61 and premium coming in at $2.86, all lower than last year's prices at this time. That same story, however, does not apply to diesel fuel prices, which, though slightly lower than last week and month at $2.99 on average, are still higher than last year's average of $2.87. 

And finally, E85 came in at $1.99, 19 cents lower than last month and 10 cents below the $2.09 we paid last year at this time. 

Natural gas

Natural gas spot prices fell at most locations for the last week reported by the U.S. Energy Information Administration that ended Wednesday, Dec. 19. Henry Hub spot prices fell from $4.20 per million British thermal units (MMBtu) to $3.56/MMBtu over that period. 

At the Nymex, the price of the January 2019 contract decreased 41 cents, from $4.136/MMBtu to $3.726/MMBtu yesterday. The price of the 12-month strip averaging January 2019 through December 2019 futures contracts declined 12 cents/MMBtu to $3.050/MMBtu.

Net withdrawals from working gas totaled 141 billion cubic feet (Bcf) for the week ending Dec. 14. Working natural gas stocks are 2,773 Bcf, which is 20 percent lower than the year-ago level and 21 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 52 cents/MMBtu, averaging $6.21/MMBtu for the week ending Dec. 19. The price of natural gasoline, ethane, propane, butane, and isobutane all fell, by 5, 9, 6, 10  and 13 percent, respectively.

For the week ending Tuesday, Dec. 11, the natural gas rig count remained flat at 198. The number of oil-directed rigs fell by four to 873. The total rig count decreased by four, and it now stands at 1,071.

Pizza company stocks

The level of holiday ho-ho-ing pizza brands did last week depended very much on which brand you were referencing. Exactly half of the four publicly traded pizza brands monitored by this site weekly had a merry seven days, while the other half were probably feeling a little like the grumbly ol' grinch.  

On the brighter side of the yuletide tree, Domino's and Yum Brands-parented, Pizza Hut, experienced lifts over the week. Domino's closed the holiday week Friday at $249.95, up more than $10 from the previous week's close of $239.47. Likewise, at Pizza Hut parent, Yum Brands, Friday's closing price sailed up $3.47 from the previous week's close to end Friday at $91.61. 

Investors had little to offer but some prime chunks of coal for Papa John's, which lost 41 cents of its value over last week to close Friday at $40.43. Meanwhile, at Papa Murphy's, investors pulled back to the tune of about 22 cents over last week's trading to end Friday at $4.80. 

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.