Article

Commodities: Most pizza stocks see bump, supply prices mixed

Commodity prices were truly a mixed bag this week with the cost of some of the most commonly used items in pizza restaurant operation truly varied, although the overall high value of the dollar has helped.

November 21, 2016 by S.A. Whitehead — Food Editor, Net World Media Group

Commodity prices were truly a mixed bag this week with the cost of some of the most commonly used items in pizza restaurant operation truly varied, although the overall high value of the dollar has helped. Pizza stocks, in general, though fared well last week, except in the case of Papa John's, which lost value.

Cheese
Cheese prices appear to be heading toward the higher prices paid earlier this month, returning last week to $1.91 on Nov. 18, up slightly from the previous week's rate of $1.89, but still below the peak of $1.94 hit on Nov. 9 and 10. 

Wheat
According to the U.S.D.A. Market News Service, export sales and shipments for wheat last week totaled 22.0 mb and 14.8 mb, which is considered neutral although the U.S. dollar continued to gain strength last week, trading at its highest prices in 13 years.

Wheat was 1 3/4 cents lower to 11 cents higher over the week. Kansas City US No. 1 Hard Red Winter, ordinary protein rail bid was steady from $4.23 3/4 to $4.98 3/4 per bushel. Kansas City US No. 2 Soft Red winter rail bid was not quoted.  

St. Louis truck US No. 2 Soft Red Winter terminal bid was steady at $4.06 per bushel. Minneapolis and Duluth US No. 1 Dark Northern Spring, 14.0 to 14.5 percent protein rail, was 11 cents higher from $6.36 3/4 to $6.41 3/4 per bushel.  Portland US Soft White wheat rail was steady to 1 3/4 cents lower from $4.65 to $4.68 per bushel.

Gasoline and diesel fuel
As far as gas and diesel prices are concerned, the news is generally good with the national average price sliding downward over the last 10 days. As a result, prices are lower than last month, but still a nickel or more per gallon greater than last year at this time. 

This morning, the average price of a gallon of regular was $2.14, about three cents lower than last week and 9 cents lower than last month, but still a nickel higher than last year at this time. Mid-grade and premium price averages reflected the same trend, with the average price for mid-grade now at $2.43 (6 cents higher than last year), while premium was $2.67 a gallon this morning (7 cents higher than last year). 

The really good news is uel costs is pretty much strictly for diesel fuel users who are paying $2.39 on average today, which is 6 cents lower than the same time last year.

Natural gas
Natural gas spot prices rose at most locations this report week (Nov. 9 to Nov. 16). The Henry Hub spot price rose from $2.22 per million British thermal units (MMBtu) last Wednesday to $2.53/MMBtu yesterday. At the New York Mercantile Exchange, the December 2016 contract rose 7 cents, from $2.690/MMBtu last Wednesday to $2.764/MMBtu yesterday.

The natural gas plant liquids composite price at Mont Belvieu, Texas, fell by 25 cents, closing at $5.60/MMBtu for the week ending Nov. 11. The prices of natural gasoline, ethane, propane, and butane fell by 3, 11, 6 and 5 percent, respectively. The price of isobutane rose by 5 percent.

The supply of natural gas remains flat. According to data from PointLogic, the average total supply of natural gas remained the same as the previous report week, averaging 77.4 Bcf/d. Dry natural gas production grew by 1 percent compared with the previous report week. Average net imports from Canada decreased by 4 percent from last week. Net injections to working gas totaled 30 billioncubic feet (Bcf) for the week ending Nov. 11. Working natural gas stocks are 4,047 Bcf, which is 1 percent greater than the year-ago level and 6 percent greater than the five-year (2011–15) average for this week.

Demand is up with total U.S. consumption of natural gas rising by 6 percent compared with the previous report week, according to data from PointLogic. Power burn was flat, averaging 23.0 Bcf/d. Industrial sector consumption increased by 2 percent week over week. In the residential and commercial sectors, consumption increased by 18 percent as a result of increased demand for home heating. Natural gas exports to Mexico were the same as last week, averaging 3.8 Bcf/d.

Spread to the January futures price remains higher than year-ago levels, increasing on the week. During the most recent storage week, the average natural gas spot price at the Henry Hub was $2.23/MMBtu, while the Nymex futures price of natural gas for delivery in January 2017 averaged $2.88/MMBtu, a difference of 65 cents. The premium was 57 cents/MMBtu during the previous storage week. The increase in the premium over the previous storage week resulted primarily from a decline in the spot price on the week because of the relatively light heating demand for natural gas. The premium was 39 cents a year ago.

Pizza company stocks
Domino's Pizza experienced an increase in value last week, ending trading at $164.31 on Friday, up $2.74 over the week.

Yum Brands also had a good week, up $1.60 to close Friday at $62.36. Papa Murphy's saw its stock price grow last week, up 8 cents to $4.65 on Friday.

The only real loser last week among the pizza stocks tracked by PizzaMarketplacd was Papa John's, which dropped $1.86 over the course of trading last week to end Friday at $85.06. 

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.