Food & Beverage

Domino's, Pizza Hut, Papa John's stocks inch up on short trading week

Cheese prices trended higher, as did most publicly traded U.S. pizza brands over the four days of buying and selling last week, when stock and commodities markets closed for Good Friday.

Photo: iStock.

April 5, 2021

Pizza restaurant company traders went into the shortened pre-Easter trading week with a nice tailwind behind most brands that continued throughout the four days of buying and selling, lifting all but one brand's stock value up, while most commodity prices fell on the week. The changes weren't dramatic in either stock or commodity prices, but as the turtle says, "Slow and steady wins the race."

Ann Arbor, Michigan-based delivery-centric brand, Domino's, managed another week of increased value as it closed Thursday afternoon (U.S. stock markets were closed in observance of the Christian holiday of Good Friday on April 2) at $373.38, up $1.54 from the previous week's closing value. Competitor, Pizza Hut, and its parent company, Yum Brands, also ticked upward to close Thursday at $109.80, up $1.74 from its closing value a week earlier on the New York Stock Exchange.

Meanwhile on the Nasdaq, Louisville, Kentucky-based, Papa John's inched forward, adding 6 cents in value over the shortened trading week, to close Thursday at $88.48. The sole loser in value — and for the second consecutive week — was Pizza Inn and Pie Five parent company, Rave Restaurant Group, that ended Thursday at the close at $1.41, down 3 cents for the week.

Cheese

Cheese producers were really the only pizza commodity traders to take home some cash last week, when the prices paid for both barrels and blocks lifted over what was also a shortened commodities trading week. The weekly average for barrels gained 4 cents for an average of $1.49, while blocks gained almost 4 cents for an average price of $1.75 last week. On the Chicago Mercantile Exchange, barrels closed at $1.51, while 40-pound blocks ended at $1.78 Thursday.

Nationwide, demand for cheese remains fairly consistent, according to the U.S. Department of Agriculture, which reported that foodservice sales have noticeably picked up as COVID-19 restrictions have eased for restaurants. In the West, some reports of slower retail sales have been received and cheese inventories are largely dependent on the production plant.

However, the U.S.D.A. reports that cheese production is picking up in light of the foodservice demand increases. Demand upticks have led some contacts to suggest cheese market tones are steady, with bullish potential.

Wheat

Last week as wheat crop condition ratings improved, wheat futures prices fell, according to the U.S.D.A., as crop conditions improved. In Kansas City, hard red winter wheat futures dropped 3 cents to finish the week at $5.65 per bushel (/bu.), while Minneapolis Grain Exchange hard red spring futures fell 14 cents to $5.99/bu. On the Chicago Board of Trade, soft red winter wheat futures decreased 2 cents to $6.11/bu.

The U.S.D.A. said that total 2021 wheat planted acres will be 46.4 million acres, up 5% (18.8 million hectares) compared to 2020. Winter wheat acres are estimated at 33.1 million acres (13.4 million hectares), up 9% year-on-year.

Auto fuel

For the first time since last November, the American Automobile Association said the national average paid for a gallon of regular unleaded decreased week-over-week to $2.86. In fact, 45 states also saw their averages decrease or remain unchanged over the week.

"Growing stock levels and cheaper crude oil prices are putting downward pressure on pump prices for the majority of motorists," Jeanette McGee, AAA spokesperson, said in a report on the weekly prices. "These are positive signs that less expensive gas prices could be around the corner, but not enough to indicate a steady trend just yet."

The U.S. Energy Information Administration reports demand has been up by 174,000 barrels per day (b/d) to 8.6 million b/d, which is 222,000 b/d under the demand level of a year earlier when consumers need for auto fuel began to decrease, AAA said. If demand continues to increase, prices could follow.

While a few cents cheaper on the week, the national gas price average is 15 cents more expensive on the month and 84 cents more expensive on the year. Those gaps, as well as stock levels and demand readings, are likely to widen in coming weeks as this time last year gas prices and related factors started to take a sharp turn due to the pandemic, AAA said.

The nation's top three most expensive averages occurred in California ($3.87), Hawaii ($3.64) and Washington ($3.32). The biggest changes in gas prices last week occurred in Kentucky and Delaware (down 6 cents), Hawaii (up 5 cents) and North Carolina, Maryland, Illinois and South Carolina, which were all down 4 cents.

The national average for a gallon of regular this morning was $2.87, which is a penny higher than last week, 12 cents higher than last month and a significant 93 cents more than what we were paying at the start of April in 2020. Mid-grade ($3.21) and premium ($3.48) were each up 2 cents on the week. At $3.09. diesel fuel was actually a penny lower on the week, while at $2.47, E85 fuel was 3 cents higher.

Natural gas

Natural gas spot prices rose at most locations for the most recent report week that ended on March 31. The Henry Hub spot price rose from $2.45 per million British thermal units (MMBtu) to $2.49/MMBtu over the period.

At the New York Mercantile Exchange, the April 2021 contract expired Monday at $2.59/MMBtu, up 7 cents/MMBtu for the week. The May 2021 contract price increased to $2.61/MMBtu, up 4 cents/MMBtu

The natural gas plant liquids composite price at Mont Belvieu, Texas, rose by 5 cents/MMBtu, averaging $7.51/MMBtu for the week. The prices of natural gasoline, ethane, propane, and butane all rose by 1%. The price of isobutane remained flat week over week.