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Commodities Report: Thanksgiving week gives pizza traders a lot to be grateful for

Pizza stocks traders were clearly overjoyed at the news last week of a federal injunction halting enactment of the federal overtime pay laws that were set to take effect this Thursday. That eleventh-hour move by a Texas judge sent pizza stock prices soaring, truly giving the publicly traded brands in this business something to be grateful for.

November 28, 2016 by S.A. Whitehead — Food Editor, Net World Media Group

Pizza stocks traders were clearly overjoyed at the news last week of a federal injunction halting enactment of the federal overtime pay laws that were set to take effect this Thursday. That eleventh-hour move by a Texas judge sent pizza stock prices soaring, truly giving the publicly traded brands in this business something to be grateful for. 

Add that to the fact that commodities, like cheese and gasoline were lower in price, while prices for wheat and natural gas remained only moderately higher, and you have the makings of a great holiday lift for those in this highly competitive business.

Cheese
Cheese prices stayed high through most of the short trading week last week, but at the close managed to fall back down to below early November levels, to close Nov. 23 at $1.86, down a nickel from the Nov. 18 price of $1.91.

Wheat:
Wheat ranged from 3 cents lower to 21 cents higher during the Thanksgiving holiday week. Kansas City U.S. No. 1 Hard Red Winter, ordinary protein rail bid was 6 3/4 to 21 3/4 cents higher from $4.30 1/2 to $5.20 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 1 cent lower at $4.05 per bushel. Minneapolis and Duluth U.S. No. 1 Dark Northern Spring, 14.0 to 14.5 percent protein rail, was 9 1/2 cents higher, from $6.46 1/4 to $6.51 1/4 per bushel. Portland U.S. Soft White wheat rail was 3 to 3 1/2 cents lower from $4.61 1/2 to $4.65 per bushel.

Gasoline and diesel fuel

Overall fairly good news on the gas and diesel front, with prices on most grades below a week and a month ago, but still significantly higher than last year at this time. The price for regular gas this morning was $2.13 on average, down a cent from last week and 9 cents from last month, but still 8 cents higher than this time last year when we were paying $2.05. 

Mid-grade and premium prices told a similar story, with mid-grade at $2.41 on average this morning, down 7 cents from last month, but up 9 cents from last year. Premium ran $2.65 on average this morning, 8 cents lower than last month, but still 9 cents higher than this time last year. The fluctuation was not as steep for diesel, but followed the same trend, with the average price of a gallon this morning at $2.38, down 4 cents from both last month and last year when we paid $2.42 on average for a gallon of diesel. 

Natural gas

Natural gas spot prices rose at most locations for the latest report week of 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.

Net injections to working gas totaled 30 billion cubic 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.

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.

Price movements were up at most locations this report week, with the Henry Hub spot price rising 31 cents, from $2.22/MMBtu l to $2.53/MMBtu. Average temperatures dropped virtually everywhere in the country this week, pushing up home heating demand and prices. At the Chicago Citygate, prices increased 27 cents from $2.15/MMBtu last Wednesday to $2.42/MMBtu yesterday. Prices on the West Coast moved similarly. At PG&E Citygate in Northern California, prices gained 40 cents, up to $2.94/MMBtu yesterday. The price at SoCal Citygate rose 33 percent over the report week to $2.68/MMBtu yesterday.

Future prices were also up. At the Nymex, the price of the December 2016 contract increased 7 cents, from $2.690/MMBtu to $2.764/MMBtu. The price of the 12-month strip averaging Dec. 2016 through Nov. 2017, futures contracts climbed 8 cents to $2.961/MMBtu.

Supply remains flat, while demand is up. Total U.S. consumption of natural gas rose 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. 

Pizza company stocks

It was a great week for pizza stocks, with Domino's Pizza leaping up in value from $162.65 at the open Monday, to $172.26 at the close of markets at the end of the short Thanksgiving trading week. 

Other brands monitored by this website told an equally Thanksgiving-worthy story on values for the week, with Pizza Hut parent, Yum Brands, closing at $63.34 for the week, up from $61.72 at the opening of trading last Monday. 

Papa John's followed suit, rising in value over the week from $84.06 at the opening bell Monday, to close the week at $88.13. And finally, Papa Murphy's closed up at $4.66 from Monday’s opening price of $4.44.

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.