Food & Beverage
Dry US 'bread-basket' works wheat prices up + pizza prices perk up too
Drought and an increasingly crunchy-dry U.S. bread-basket region are helping to push wheat futures up, with nearly half of the nation's winter wheat crop now in the ground. But on the better news front, most of the major pizza restaurant brands are also picking up points with investors.
October 19, 2020 by S.A. Whitehead — Food Editor, Net World Media Group
In the nation's wheat belt, drought is threatening not only forests with increasing fire threats, but the U.S. wheat crop with a potentially deadly dry growing season. But the good news for pizza purveyors is that investors appear to be in a good mood about putting their money into some of the country's biggest pizza restaurant brands. Three of the four major pizza companies monitored by Pizza Marketplace picked up value in last week's trading.
The Ann Arbor, Michigan-based delivery-centered, Domino's Pizza, for instance, regained some of the nearly $43 dollars it lost in value over trading two weeks ago, to close this past Friday at $399.45, up $8.49 from the previous week's close.
In Louisville, Kentucky, two other pizza restaurant companies picked up some favor with investors, beginning with Papa John's, which gained $1.61 in value over the week to close Friday at $81.50. Meanwhile, Pizza Hut parent, Yum Brands posted a $3.04 gain over the trading week to close Friday at $98.53.
The only company to lose value last week was the one that had gained so much a week earlier, Rave Restaurant Group. Over last week, the Pizza Inn and Pie Five parent settled back down a bit to close Friday at nearly 74 cents, down 7 cents from the previous week's value.
Cheese
Cheese prices nationally again trended up last week, especially for barrels which gained 16 cents in value last week when the average price paid was $2.17. Blocks also edged up, with a weekly average price $2.71, up nearly 7 cents on the week, according to the U.S. Department of Agriculture. Closing prices for each quantity included almost $2.21 for barrels and $2.72 on 40-pound blocks.
Even with a relatively large price gap between block and barrel prices, barrel prices are maintaining resilience, slowly bridging the gap between the two quantities daily, the U.S.D.A. said. Cheese demand is reportedly consistent, with both retail and government bids keeping inventories in check., the U.S.D.A. said.
Wheat
Wheat prices nationally trended mostly upward to an average of $6.25 per bushel Friday, with drought across the Plains and Western states spurring more technical buying. December Chicago soft red winter wheat futures grew more than 8 cents to almost $6.27, while December Kansas City hard red winter wheat futures picked up a penny to come in at $5.59. December Minneapolis Grain Exchange spring wheat futures were up a half-cent to just over $5.59.
In the U.S., approximately 68% of all winter wheat area intended for harvest next year is in the ground, which is ahead of last year. But, abnormal dryness in Montana, North Dakota, Kansas, Oklahoma, Colorado and the Texas and Nebraska Panhandles is causing concerns.
Auto fuel
Last week, the national average for a gallon of regular unleaded gasoline fell a penny to $2.17, which is also a cent lower than the previous week and month and a hefty 47 cents under what American motorists paid last year at this time. In fact, the U.S. Energy Information Administration reported that gas demand fell from 8.90 million barrels a day (b/d) to 8.58 million b/d. As a result, prices at the pump are lower, a trend which the American Automobile Association said it expects to continue.
The biggest weekly changes in gas prices in the U.S, were seen in Delaware, where prices gained 9 cents week over week, followed by Indiana where prices actually fell 6 cents for the same period and then Maryland where gas prices were five cents higher a gallon last week over the previous seven days, AAA said.
This morning the current price for a gallon of regular was $2.17 on average nationally, which is 2 cents lower than last week and a penny lower than last month's price, AAA said. The same trend continued across mid-grade ($2.51) and premium ($2.78).
The average price of a gallon of diesel this morning was $2.38, equal to last week but 2 cents lower than what we paid one month earlier. At an average of $1.96 per gallon nationally, E85 prices have fallen 2 cents in the last week and last month.
Natural gas
Natural gas spot prices rose at most locations for the most recent seven days reported that ended on Oct. 14. The Henry Hub spot price remained flat at $2.03 per million British thermal units (MMBtu).
At the New York Mercantile Exchange, the price of the November 2020 contract increased 3 cents, from $2.601/MMBtu to $2.64/MMBtu. The price of the 12-month strip averaging November 2020 through October 2021 futures contracts climbed 8 cents/MMBtu to $3/MMBtu.
The natural gas plant liquids composite price at Mont Belvieu, Texas, rose by 23 cents/MMBtu, averaging $5.05/MMBtu for the period. The prices of ethane, propane, natural gasoline, butane, and isobutane all rose, by 4%, 4%, 5%, 6% and 8%, respectively.
About S.A. Whitehead
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.
