Article

Commodity prices all up, aside from two pizza stocks

It was an up week for the price of all commodities last week, although Domino's and Papa John's stocks fell.

June 6, 2016 by S.A. Whitehead — Food Editor, Net World Media Group

Aside from two pizza stocks last week, commodity prices and prices for Papa Murphy's and Yum! Brands were all up last week. Of particular interest this week may be the natural gas market, which is well on its way to showing a shift in the nation's energy policies and usage of mostly coal for power generation to natural gas. Analysts believe this could be the first year on record that natural gas usage exceeds that for coal in the U.S. 

Cheese

Average block cheese was up during the week on the Chicago Mercantile Exchange, reaching a high of $1.44 on Friday, after a low of $1.36 Wednesday. The market was closed last Monday, Memorial Day, but on Tuesday the price was $1.37, $1.36 on Wednesday, $1.40 on Thursday and up to $1.44 Friday. One month earlier the price was $1.34 on May 3.

Wheat

Wheat prices jumped 12 cents last week, closing at $5.40 Friday on the Minneapolis Grain Exchange. That's up from the previous Friday's close of $5.28.

Gasoline and diesel fuel

Monday's nationwide average for regular unleaded gasoline was $2.36, up 4 cents from $2.32 the previous week, according to AAA and the Oil Price Information Service.

Prices are also up from $2.22 a month ago, but still significantly lower than this time last year, when consumers were paying $2.75 at the pump.

Mid-range unleaded is $2.60, while Monday's premium unleaded price was $2.83.

The nationwide average for diesel fuel is $2.35, up 3 cents from a week ago. Diesel prices are also up from $2.22 a month ago, and substantially down from $2.87 a year ago.

Natural gas

Warm summerlike weather in recent days has led to increased consumption of natural gas for power generation as air conditioning demand ramped up, according to data from PointLogic. Power generation on May 31 was at its highest level so far this year at 31.2 billion cubic feet (Bcf), as temperatures reached into the 80s and 90s in many areas of the U.S. Temperatures are expected to remain warm in the coming days.

Consumption of natural gas for power generation has remained relatively high in recent years, with 2015 setting a record high for natural gas burned for power generation. So far, in 2016, average power burn has exceeded 2015 levels by 8.6 percent, or 2.0 Bcf per day, according to PointLogic. The U.S. Energy Information Administration expects this trend will continue, with the administration's current Short-Term Energy Outlook forecasting that power burn in 2016 will exceed last year's record by 4 percent. Additionally, the agency forecasts that for the year, natural gas generation. as a share of total generation. will exceed coal for the first time on record. Much of the growth in power burn is coming from the southeast, the largest consuming region in the U.S. The southeast showed a 10.4 percent increase in power burn from May 2015 to May 2016.

Low natural gas prices and growth in natural gas power generation infrastructure are the main driving factors behind this consumption growth. While the summer season is generally the time of year when power burn is highest because of air conditioning demand, gas consumption for power generation has also been rising in the winter as natural gas makes up a larger share of baseload generation.

Pizza company stocks

Shares in Pizza Hut parent Yum! Brands Inc. closed Friday at $82.61, up 15 cents from the previous close of $82.46.

Domino's finished last week down $1.04 at $1.22.

Papa John's also fell, down 72 cents to $62.55.

Shares in Papa Murphy's closed at $7.68 Friday, up from $7.51 a week earlier. 

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.