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Domino's, Papa John's stocks tick up, possible good news en route for gas prices

While stock values on the big brands played out their drama on the trading floor last week, crude production soared to levels not seen in nearly two years, potentially signaling saner gas prices this summer to deliver those ever-increasing numbers of pizza orders

May 6, 2019 by S.A. Whitehead — Food Editor, Net World Media Group

A jump in domestic crude inventories to nearly a 2-year high last week may work to help pizza operators lower their delivery vehicle fuel costs over the warmer summer months to come, bringing the possibility of better news ahead to the pizza restaurant operations landscape. 

Among the four brands monitored here, only Pizza Hut parent, Yum Brands, took a hit last week.

Cheese

At markets close at the end of last week, the U.S.D.A. Agricultural Marketing Service reported that nationally, cheese inventories were building, as production increased with seasonal milk escalations.

Cheese demand is mixed in the Midwest and West, the service reported, though more active in the East. In fact, when compared with much of 2018, this year has generally trended higher on the cheese markets with the price of barrels remaining exceptionally steady, while blocks have slipped slightly since last week.

Friday on the Chicago Mercantile Exchange, barrels closed at $1.66, up 3 cents from the previous week's close, while blocks fell a penny in average price to $1.68 on close on May 3. 

Wheat

In wheat trading last week, cash bids for the essential dough grain were mixed with winter wheat reported at 92 percent "Fair" to "Excellent." Export sales for the week ending April 25 totaled 4.5 million bushels of wheat with wheat ranging from 20 cents lower to 20 cents higher. 

Kansas City U.S. No. 1 Hard Red Winter, ordinary protein rail bid was 7 1/4 cents lower, from $5.17-$5.27 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 to 2 cents higher, from $4.65-$4.74 per bushel.  Minneapolis and Duluth U.S. No. 1 Dark Northern Spring, 14.0 to 14.5 percent protein rail, was 15 to 20 cents higher at $6.20 3/4 per bushel.  Portland U.S. Soft White wheat rail was steady to 20 cents lower, from $5.60-$5.90 per bushel.

Vehicle fuels

According to the American Automobile Association, government reports showed that domestic crude inventories jumped significantly last week to a level that the U.S. has not seen since September 2017, according to the  U.S. Energy Information Administration's data. 

The increase was due to an all-time record high for domestic crude production to levels that could play a role in helping to keep gas prices low this summer, since crude comprises roughly half of the cost American motorists pay at the pump. However, if crude exports from the U.S. increase this summer, the domestic crude that could be used to make gasoline for American motorists will be siphoned off to meet restricted supply in the global crude market, AAA reported.

For the meantime, the average price of a gallon of unleaded today was at $2.90, up a penny from last week and 16 cents since this time one month ago. In fact, the current average price on unleaded is nearly 9 cents higher than it was last year at this time. 

Mid-grade ($3.21) and premium gas ($3.46) followed the same price growth curve, while diesel ($3.11) and E85 ($2.45) were up, but not as dramatically over the last month, when diesel was just 7 cents lower and E85 was 5 cents lower. 

Natural gas

Natural gas spot prices rose at most locations for the seven-day period ending Wednesday, May 1. Henry Hub spot prices rose from $2.50 per million British thermal units (MMBtu) to $2.62/MMBtu over that time, according to the U.S. Energy Information Administration.

At the Nymex, the May 2019 contract expired Friday at $2.566/MMBtu, up 10 cents/MMBtu and the June 2019 contract increased to $2.620/MMBtu, up 12 cents/MMBtu. The price of the 12-month strip averaging June 2019 through May 2020 futures contracts climbed 8 cents/MMBtu to $2.747/MMBtu.

Net injections to working gas totaled 123 billion cubic feet (Bcf) for the seven-day period ending April 26. Working natural gas stocks are 1,462 Bcf, which is 10% more than the year-ago level and 18% lower than the five-year (2014-18) average for this week.

The natural gas plant liquids composite price at Mont Belvieu, Texas, fell by 1 cent/MMBtu, averaging $6.11/MMBtu for the seven days ending May 1. The price of isobutane, natural gasoline, and butane fell by 1, 2 and 3 respectively. The price of propane rose by 2%. The price of ethane remained flat week over week.

According to Baker Hughes, for the week ending Tuesday, April 23, the natural gas rig count decreased by one to 186. The number of oil-directed rigs fell by 20 to 805. The total rig count decreased by 21, and it now stands at 991. 

Pizza company stocks

Domino's had another money-making week on the New York Stock Exchange. Its stock value was up $6.32 Friday to finish the week at $279.75.  Pizza Hut, however, did not fare as well in trading last week when its parent company, Yum Brands, ended the week down $1.37 to close Friday at 102.72.

At the re-energized and re-emerging Papa John's brand, however, traders poured on a little more love. Its value increased $1..67 to end the week's trading on the Nasdaq at $53.06. And speaking of re-energized and re-emerging, the recently newly acquired take-and-bake chain, Papa Murphy's, held tight last week to end even with its value from the previous week of $6.46.

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.