Article

Domino's, Papa John's 'treated,' Pizza Hut ... not so much

On the stock market last week, investors were in a 'tricky' mood when it came to Pizza Hut parent, Yum Brands, though they morphed into little darlings with Domino's and Papa John's, handing out nothing but treats.

Photo: iStock

October 28, 2019

As we approach the annual occasion of tricks and treats this week, the commodities and stock markets followed suit with both tricks and treats for pizza operators last week. So, although the prices for cheese edged up on markets last week, delivery-centric pizza operators at least got some "treats" from lower prices at the pump. 

Cheese

On the Chicago Mercantile Exchange, barrels closed Friday at $2.25, up 25 cents from the previous week. Meanwhile, blocks also closed up at $2.12, compared to $1.97 at the previous week's close. 

In the Midwest, cheese barrel makers reported told the U.S.D.A. that orders continued to be strong, with specialty cheese makers busy in all regions thanks to holiday gift package orders. 

In the European Union, the semi-hard cheese market is firm with sales from all channels reported to be good, particularly the food retail sector, with strong demand both in and outside the EU. Meanwhile, in the U.S., domestic prices for Parmesan, and Romano have declined by 3 cents, but all other prices are stable. 

Wheat

Cash bids for wheat were reported to be mixed, with wheat export sales reporting an increase of 9.6 million bushels for 2019-20. Wheat was 11 3/4 cents lower to 13 cents higher overall, according to the U.S.D.A.

Kansas City U.S. No. 1 Hard Red Winter, ordinary protein rail bid was 11 3/4 cents lower, from $4.89 1/2- $4.99 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 steady at $5.11 per bushel. Minneapolis and Duluth U.S. No. 1 Dark Northern Spring, 14.0 to 14.5 percent protein rail, was 8 to 13 cents higher at $6.85 per bushel. Portland U.S. Soft White wheat rail was steady to 2 cents lower, from $6.01-$6.05 per bushel.

Vehicle fuel

The U.S. Energy Information Administration reported that total domestic gasoline stocks continue to decline, with gas stocks falling by 3.1 million bbl last week alone, bringing the total to 223.1 million bbl. The current level is 6.2 million bbl below last year's level at this time.

Although stocks have tightened amid robust demand — which grew by 250,000 b/d 10 days ago to 9.6 million bbl — low crude prices have helped to push down pump prices. Since last Monday, the national average for unleaded regular gasoline has fallen by two cents to $2.62, according to the American Automobile Association.

Today, the average price of a gallon of regular was down 5 cents from last week's and last month's price, to $2.60, and well below the price we paid last year at this time of $2.82. Mid-grade $2.95) and premium ($3.21) were also down a nickel over the previous week's price. 
The fluctuation for E85 which came in at $2.29 followed suit with the gasoline grades, but at $3 a gallon, diesel was flat week over week in price. 

Natural gas

Natural gas spot price movements were mixed this report week for the seven days ending on Wednesday, Oct, 23, though Henry Hub spot prices rose from $2.25 per million British thermal units (MMBtu) to $2.28/MMBtu over the same period.

At the New York Mercantile Exchange, the price of the November 2019 contract decreased 2 cents, from $2.303/MMBtu to $2.282/MMBtu over those seven days, while the price of the 12-month strip — averaging November 2019 through October 2020 futures contracts — declined 3 cents/MMBtu to $2.348/MMBtu.

Net injections to working gas totaled 87 billion cubic feet (Bcf) for the week ending Oct. 18. Working natural gas stocks are 3,606 Bcf, which is 17% more than the year-ago level and 1% more than the five-year (2014-18) average for the week.

The natural gas plant liquids composite price at Mont Belvieu, Texas, fell by 8 cents/MMBtu, averaging $5.20/MMBtu for the week ending Oct. 23. The price of ethane, propane, and natural gasoline fell by 4%, 2%, and 1% respectively. The price of butane and isobutane remained flat week over week.

According to Baker Hughes, for the seven days ending Tuesday, Oct. 15, the natural gas rig count decreased by six to 137. The number of oil-directed rigs rose by one to 713. The total rig count decreased by five, and it now stands at 851.

Pizza company stocks

As Halloween approaches, investors handed "treats" to Papa John's and Domino's, but tricks to Pizza Hut parent, Yum Brands last week in trading. 

Papa John's closed up $2.89 on the week, ending up Friday at the close at $57.42. Domino's saw an even better lift from its investor/fans last week, closing up a hefty $16.05 over the week to end Friday at $271.75. 

Pizza Hut parent, Yum Brands was not near as fortunate last week though, with traders taking the brand down a notch in value from $112.39 on Oct. 18, to $109.10 last Friday at the close.