Article

Commodities: Pizza investors put wallets on 'lock-down'

Investors apparently had the holiday spending jitters last week, pulling in their proverbial purse strings on all the pizza brands monitored by this site weekly, especially pizza giant, Domino's, which saw its stock value dive under the evergreen boughs to the tune of $19 in value over the week.

December 10, 2018 by S.A. Whitehead — Food Editor, Net World Media Group

Investors apparently had the holiday spending jitters last week, pulling in their proverbial purse strings on all the pizza brands monitored by this site weekly, especially pizza giant, Domino's, which saw its stock value dive under the evergreen boughs to the tune of $19 in value over the week. There was some good news though from lower cheese prices and gasoline prices that  — for the first time this year — dropped below year-ago per-gallon rates for regular, mid-grade and premium. 

Cheese

Barrels closed at $1.22, while 40-pound blocks finished at $1.35. The weekly average for barrels is $1.26 (down .0095) and blocks, $1.35 (down .0030). 

The U.S.D.A. reports that milk availability for cheese production is finding some balance nationally, though central contacts for the administration report milk is becoming tougher to obtain in some areas. Domestic and international cheese buyers are purchasing on a hand-to-mouth basis, as total inventories are heavy. 

On the production side, holiday orders are adding a day to weekly schedules, while a number of cheesemakers are ebbing production shifts in order to manage inventory levels. Long cheese inventories and trade issues are keeping bearish pressure on cheese markets, as barrel prices are on pace to hit their lowest yearly Chicago Mercantile Exchange average since 2009. Contacts suggest lower cheese prices internationally are adding to the strife. 

Wheat

Compared to last week, cash bids for wheat were mixed, according to the U.S.D.A. Missouri Department of Agriculture Market News, with wheat net sales of 711,800 metric tons for 2018/2019, up 89 percent from the previous week and 58 percent from the prior four-week average. Exports of 480,700 MT were up 93 percent from the previous week and 43 percent from the prior four-week average.  

Kansas City U.S. No. 1 Hard Red Winter, ordinary protein rail bid was 33 cents higher, from $6.15 1/2-$6.30 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 14 to 18 cents higher, from $5.35-$5.41 per bushel. Minneapolis and Duluth U.S. No. 1 Dark Northern Spring, 14.0 to 14.5 percent protein rail, was 38 3/4 cents lower to 1/4 percent higher, from $6.74 1/4-$7.13 1/4 per bushel. Portland U.S. Soft White wheat rail was steady, from $6.15-$6.30 per bushel.

Vehicle fuel

According to AAA this morning, growing global crude supplies are outpacing demand, which has driven December gas prices down to their lowest levels this year. Indeed, prices today for a gallon of regular averaged $2.42, an impressive 28 cents lower than just this time last month. That is, for the first time this year, about 4 cents below what we paid last December at this time. 

Mid-grade ($2.76) and premium ($3.01) followed that same trend, though mid-grade was about the same price as one year ago, and premium was just one cent lower. Likewise, diesel and E85 prices failed to fall below their year-ago level, but still managed to drop slightly from last week. Diesel averaged $3.11 today, down 15 cents from last month, but still 27 cents higher than year-ago levels, while E85 came in at $2.14 today, 10 cents higher than year ago levels but 18 cents lower than last month at this time. 

Natural gas

Natural gas spot prices rose at most locations for the seven days ending Dec. 5, according to the U.S. Energy Information Administration. Henry Hub spot prices rose from $4.44 per million British thermal units (MMBtu) to $4.62/MMBtu Dec. 5. At the New York Mercantile Exchange (Nymex), the December 2018 contract expired at $4.715/MMBtu. The January 2019 contract price decreased to $4.469/MMBtu, down 23 cents/MMBtu from Wednesday to Wednesday.

Net withdrawals from working gas totaled 63 billion cubic feet (Bcf) for the week ending Nov. 30. Working natural gas stocks are 2,991 Bcf, which is 19 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, rose by 16 cents/MMBtu, averaging $6.67/MMBtu for the seven days ending Dec. 5. The price of natural gasoline, ethane, butane, and isobutane rose by 5, 2, 6 and 4 percent, respectively. The price of propane remained flat week over week.

According to Baker Hughes, for the week ending Tuesday, Nov. 27, the natural gas rig count decreased by five to 189. The number of oil-directed rigs rose by two to 887. The total rig count decreased by three, and it now stands at 1,076.

Pizza company stocks

Last week's gains were this week's pains for the publicly traded pizza brands monitored by Pizza Marketplace weekly, with pie giant Domino's standing by to watch all the gains of the previous week erased and then some. The stock closed Friday at $258.32, down a very holiday humbug-ish $19 over the week.  

At its Yum Brands-parented competitor, Pizza Hut, the loss was not as breathtaking, but a loss nonetheless over last week when investors pulled back on their faith in the brand to the tune of $1.79 over the week. The brand ended up on Friday at $90.43 at the close. 

Beleaguered competitor, Papa John's also dropped in value over the week from $47.99 on Nov. 30 to $45.08 last Friday, while Papa Murphy's fell 9 cents in value over last week to end Friday at the close of markets at $5.13. 
 

Photo: iStock

About S.A. Whitehead

---

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.