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Commodities: A 'trick-y' market for pizza restaurateurs

If you're a pizza restaurateur and you’re still hiding under your covers this Monday, you're likely not alone. Not only are we beginning that last rocky week before the presidential election, but commodity prices mostly increased last week.

October 26, 2016 by S.A. Whitehead — Food Editor, Net World Media Group

If you're a pizza restaurateur and you're still hiding under your covers this weekend, you're likely not alone. Not only are we beginning that last rocky week before the presidential election, but commodity prices mostly increased last week, while many restaurant industry stocks lost value last week.

Domino's, which has been increasing in value in recent weeks, jumped up again last week at the close, while Pizza Hut parent, Yum Brands, rose slightly. For other pizza companies monitored here, the exact opposite was true, giving new, far less "sweet" meaning to the idea of "trick or treat" for this Halloween season. 

Cheese

Cheese prices took quite a jump on Friday, to close out the week at $1.73, up 8 cents from the previous Friday's close of $1.65 and even above the high we saw in early September of $1.72. 

Wheat
Compared to previous week, wheat prices — much like those for most of the other grain crops — were higher last week. Winter wheat is at 79 percent planted, with 60 percent emerged.  

Weekly export sales and shipments for wheat totaled 24.7 mb and 9.7 mb respectively, which the USDA said may be viewed as neutral.  Wheat export sales were above the amount needed to keep on pace with the USDA's October demand projection. However, weekly shipments were below the numbers needed to satisfy the projection.  

Wheat was mostly 1 to 10 cents higher with Kansas City US No. 1 Hard Red Winter, ordinary protein rail bid was 4 cents higher from $4.22-$4.79 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 higher at $4.03 per bushel.  

Minneapolis and Duluth U.S. No. 1 Dark Northern Spring, 14.0 to 14.5 percent protein rail, was 15 3/4 to 30 3/4 cents lower from $6.25 1/2- $6.50 1/2 per bushel.  Portland U.S. Soft White wheat rail was 2 1/2 to 10 cents higher from $4.62- $4.79 1/2 per bushel.

Gasoline

Gasoline and diesel vehicle fuels didn't deliver much in the way of good news either over the past week, with the price of all but diesel fuel rising above the level for gas last year at this time, but still very slightly down from a week ago. 

For regular fuel, we were paying an average of $2.21 a gallon this morning, down a cent from last week, but above the $2.18 we paid last year at this time. The story remained the same for mid-grade and premium fuels, with the average price for mid-grade at $2.48 this morning, down a penny from last week, but still a cent more than a month ago and 3 cents more than this time last year. Premium was at $2.72 a gallon, also down a cent from a week ago and up a cent from a month ago, but a nickel more per gallon than this time last year. Diesel fuell bucked that trend though, averaging about $2.42 a gallon this morning. That's the same as last week but 7 cents higher than a month ago and 7 cents lower than a year ago. 

Natural gas 
Natural gas spot price movements were mixed for the report week of Oct. 19 to Oct. 26.  The Henry Hub spot price fell from $3.14 per million British thermal units (MMBtu) last Wednesday to $2.68/MMBtu yesterday. 

Net injections to working gas storage totaled 73 billion cubic feet (Bcf) for the week ending Oct, 21. Working natural gas stocks are 3,909 Bcf, which is 1 percent greater than the year-ago level and 5 percent greater than the five-year (2011–15) average for this week.

The natural gas plant liquids composite price at Mont Belvieu, Texas, rose by 3 cents, closing at $6.23/MMBtu for the week ending Oct. 21. The prices of ethane and isobutane both fell by 1 percent. The prices of propane and butane rose by 1 and 4 percent, respectively. The price of natural gasoline remained flat week over week. 

Spot price movements were mixed on the week, with the Henry Hub spot price falling 46 cents from $3.14/MMBtu last Wednesday to $2.68/MMBtu yesterday. Many other price points featured similar movements. At the Chicago Citygate, prices decreased 36 cents to $2.82/MMBtu yesterday. Prices at PG&E Citygate in Northern California fell 18 cents, down to $3.07/MMBtu yesterday. The price at SoCal Citygate decreased 43 cents to $2.84/MMBtu yesterday. These price declines occurred despite falling temperatures across most of the country, which increased home-heating demand.

November futures were down. At the Nymex, the price of the November 2016 contract decreased 44 cents, from $3.170/MMBtu last Wednesday to $2.731/MMBtu yesterday. The price of the 12–month strip averaging November 2016 through October 2017 futures contracts declined 32 cents to $3.045/MMBtu. 

Pizza company stocks
Last week was very good to Domino's pizza, which closed out up $1.98 to $167.92 at Friday's close. Competitor, Pizza Hut and its parent company, Yum Brands were also up, 36 cents over the previous week to $85.72.

The news was not so cheerful though for the Papas. Papa John's, for instance, closed Friday at $73.85, that's off 67 cents from the prior week. Papa Murphy's continued its decline, down 15 cents at Friday's close to $5.22. 

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.