Article

Commodities: Papa John's pulls out of nosedive, while Domino's dips

In trading, both commodities and stock, it has been a truly up-and-down week for pizza restaurateurs.

August 20, 2018 by S.A. Whitehead — Food Editor, Net World Media Group

It was an up-and-down week for both pizza commodities and stock trading on brands last week. Essentials like cheese and natural gas tilted upward, while wheat  and vehicle fuel prices fell slightly. Meanwhile, on the New York Stock Exchange and Nasdaq, investors showed signs of faith in Papa John's chance at a recovery from its brand nightmare. 

Cheese

Forty-pound blocks of cheese closed Friday at $1.655, while barrels closed at $1.67, according to the U.S.D.A. Agricultural Marketing Service. The weekly average for barrels was $1.6675 (up .1330) and blocks, $1.6570 (up .0460).

Meanwhile, with seasonal milk yield downturns and schools taking on more fluid milk, spot milk supplies into cheese production remain available, but slightly lower than in recent weeks. Spot milk prices were between $.50 under to $2.00 over class this week in the Midwest. 

Cheese production is mixed regionally. Some centrally located cheese plant managers are tightening work schedules, as cheese inventory concerns persist. While Western producers are running active schedules, as food service consumption has picked up with the onset of the school year. 

Wheat

Cash bids for wheat were mixed, but mostly lower. Total U.S. wheat shipments in 2018-19 are still in a hole, down 36 percent from a year ago, but are expected to increase, thanks to this year's smaller world production. Wheat sales were a solid 29.5 million bushels, with the price ranging from 23 1/2 cents lower to 3 cents higher.  

Kansas City U.S. No. 1 Hard Red Winter, ordinary protein rail bid was 16 cents lower, from $6.47 1/2-$6.62 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 22 to 23 cents lower, from $5.37-$5.42 per bushel. Minneapolis and Duluth U.S. No. 1 Dark Northern Spring, 14.0 to 14.5 percent protein rail, was 13 1/2 to 23 1/2 cents lower, from $6.71 1/4-$6.81 1/4 per bushel. Portland U.S. Soft White wheat rail was 8 cents lower to 3 cents higher, from $6.15-$6.20 per bushel.

Vehicle fuel

Though still mostly lower than last month, vehicle fuel prices appear to be stabilizing at a range of 1 to 2 cents below the per-gallon price a month ago. The average price for regular his morning was $2.84, which is 2 cents lower than last and a penny under last month. Other gasoline grades followed suit, along with diesel which averaged $3.14 this morning, 2 cents below last month's rate. All gas and diesel fuel, however, remains about 50 cents higher than what we paid this time last year. 

E85 fuel vehicles, however, will be paying just about the same as they have for the last month at an average price today of $2.41, the same as last month, but a full 42 cents higher than last year. 

Natural gas

According to the U.S. Energy Information Administration, natural gas spot prices rose at most locations for the report week that ended last Wednesday, Aug. 15.  Henry Hub spot prices rose from $2.97 per million British thermal units (MMBtu) last Wednesday to $3.01/MMBtu yesterday.

At the New York Mercantile Exchange (Nymex), the September 2018 contract price fell 1 cent, from $2.949/MMBtu last Wednesday to $2.940/MMBtu Aug. 15. Net injections to working gas totaled 33 billion cubic feet (Bcf) for the week ending Aug. 10. Working natural gas stocks are 2,387 Bcf, which is 22 percent lower than the year-ago level and 20 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 6 cents, averaging $8.95/MMBtu for the week ending Aug. 15. The price of natural gasoline, butane, and isobutane fell by 2, 2, and 1 percent, respectively. The price of ethane rose by 1 percent and the price of propane remained flat week over week.

According to Baker Hughes, for the week ending Tuesday, Aug. 7, the natural gas rig count increased by three to 186. The number of oil-directed rigs rose by 10 to 869. The total rig count increased by 13, and it now stands at 1,057.

Pizza company stocks

In pizza stocks trading last week, investors showed some faith in the ability of Papa John's leadership to pull the brand out of current bad press nightmare nosedive, by giving the chain some love on the trading floor to the tune of a $3.67 increase in stock value last week. The brand closed Friday at $43.93.  

Domino's was not as fortunate last week, closing down $6.27 on the week to close Friday at $285.04, after a healthy hike in price the previous week. Pizza Hut parent, Yum Brands, however, was up slightly on the week to close at $83.81, 87 cents higher than the previous week's rate. 

Papa Murphy's also rose slightly on the week, up 6cents from the previous week to close Friday at $5.37. 
 

Photo: iStock

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.