Commodities: The 'dog days of summer' toss pizza operators a bone

| by S.A. Whitehead
Commodities: The 'dog days of summer' toss pizza operators a bone

The dog days of summer gave pizza operators a little something to howl about last week when the prices for most pizza staples trended downward, while stock prices rose generally. Even fuel for all those delivery cars — owned or otherwise — remained flat on the week and down for the month. 


Barrels closed at $1.6000, down 7 cents from last week's close, while 40-pound blocks ended the week at $1.6700, up from the previous Friday's close of last Friday's closing price of $1.6550. The weekly average for barrels was $1.5905 ( off .0770) and blocks, $1.6370 (off .0200).

Nationally, the U.S.D.A. reports that cheese production is steady to strengthening. Overall, cheese market tones are somewhat bullish and milk availability into cheese production remains sufficient, though cheesemakers' access to milk is
continuing its seasonal downward drift with schools taking on more bottled milk and warm, wet weather affecting farm milk output. 


Compared to last week, cash bids for wheat were mostly lower, though the U.S.D.A. reports that trade disputes continue to chase more uncertainty. President Trump has stated that he has no timetable to establish any new trade deals and this could have major implications down the road for the U.S. market share of exportable grains. 

New estimates from the International Grains Council reduced the estimate of world wheat production from 721 million metric tons (mmt) to 716 mmt (26.3 bb) on Thursday, now 5.5 percent less than a year ago.  The new season's lower supplies should help U.S. wheat exports in the future.  

The U.S.D.A. said the previous week's export sales and shipments of wheat totaled 8.8 mb and 16.9 mb respectively,
another bearish week that has total wheat shipments down 34 percent in 2018-19 from a year ago.  Wheat was from 20 cents lower to a 1/2 cent higher, with Kansas City U.S. No. 1 Hard Red Winter, ordinary protein rail bid at 15 1/4
cents lower, from $6.32 1/4-$6.47 1/4 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 20 cents lower, from $5.17-$5.22 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 lower to 1/2 cent higher, at $6.71 3/4 per bushel.  Portland U.S. Soft White wheat rail was 7 to 9 cents lower, from $6.08-$6.11 per bushel.

Vehicle fuel

All grades and types of auto fuels were down 1 to 2 cents last week, when compared with last month's per-gallon price. Regular, for instance, clocked in this morning at $2.84, down from $2.86 a month earlier. The same trend held true across mid-grade and premium gas, though the difference was not as dramatic for diesel and E85.

Diesel settlde in this morning at $3.14, while E85 was $2.42, both about a cent below last month's price. Of course, all these prices are 40 to 50 cents higher than last year at this time, depending on fuel type and gas grade. 

Natural gas

Natural gas spot prices fell at most locations for the report week ending Aug. 22. Henry Hub spot prices fell slightly from $3.01 per million British thermal units (MMBtu) to $2.99/MMBtu last Wednesday. At the New York Mercantile Exchange (Nymex), the September 2018 contract price rose 2 cents, from $2.940/MMBtu to $2.956/MMBtu over the same period.

Net injections to working gas totaled 48 billion cubic feet (Bcf) for the seven days ending Aug. 17. Working natural gas stocks are 2,435 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, rose by 6 cents, averaging $9.00/MMBtu for the seven days ending Aug. 22. The price of propane fell by 1 percent, while ethane and isobutane both rose by 2 percent. The price of butane rose by 3 percent, while the price of natural gasoline remained flat week over week.

According to Baker Hughes, for the week ending Tuesday, Aug.. 14, the natural gas rig count remained flat at 186. The number of oil-directed rigs remained constant at 869. The total rig count stayed at 1,057.

Pizza company stocks

Papa John's got a lift for the second straight week by investors, who helped push the brand up 77 cents to close Friday at $44.70 on the NASDAQ. Meantime, over on the New York Stock Exchange, traders gave Domino's a roll to push its closing price up $12.91 on the week, to end Friday at 297.95 (from  $285.04.

Yum Brands Inc. — parent company of Pizza Hut — also did well in last week's trading, closing Friday at $84.14 from the previous week's close of $83.81. Lastly, Papa Murphy's also reported increased investor confidence last week when it closed Friday at $5.42. That's up a nickel from the previous week's close of $5.37. 

Photo: iStock

Topics: Business Strategy and Profitability, Cheese, Delivery, Dough, Financial Management, Financial News, Operations Management, Ovens

S.A. Whitehead

Award-winning veteran print and broadcast journalist, Shelly Whitehead, has spent most of the last 30 years reporting for TV and newspapers, including the former Kentucky and Cincinnati Post and a number of network news affiliates nationally. She brings her cumulative experience as a multimedia storyteller and video producer to the web-based pages of and after a lifelong “love affair” with reporting the stories behind the businesses that make our world go ‘round. Ms. Whitehead is driven to find and share news of the many professional passions people take to work with them every day in the pizza and quick-service restaurant industry. She is particularly interested in the growing role of sustainable agriculture and nutrition in food service worldwide and is always ready to move on great story ideas and news tips.

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Commodities: Down, down, down ... unless you're Papa John's