Article

Fuel prices soar, pizza stock values tumble over April Fool's week trading

The joke — and not a nice one — was on pizza restaurateurs during April Fool's Week last week.

April 8, 2019 by S.A. Whitehead — Food Editor, Net World Media Group

The joke — and not a nice one — was on pizza restaurateurs during April Fool's Week last week, when soaring fuel prices and falling stock values hardly left pizza brands' leadership laughing. In fact, cheese trading prices may have been the only thing that triggered smiles.

Cheese

Cheese barrels closed at $1.58, while 40-pound blocks ended up at $1.66. But the weekly average for both barrels and blocks was off, with barrels averaging $1.58, down a penny, and blocks averaging, $1.65, off 3 cents, according to the U.S.D.A. Agricultural Marketing Service. 

Cheese production is going strong as spring temperatures have begun to appear in all parts of the U.S. Contacts told the marketing service that spring flush has begun in the West and South, and is moving north. Demand is between stable picking up across the country. 

The U.S.D.A. said that spring holidays and spring-related outdoor activities are putting some upward pressure on cheese markets, while the overall market tone has been relatively steady.

Wheat

Compared to last week, cash bids for wheat were mixed, but as the month of April began, planting delays took the forefront, as waterlogged, cold soil is a concern.  Export sales for week ending March 28 totaled 25.9 million bushels of wheat.  Wheat was 57 3/4 cents lower to 10 cents higher. 

Kansas City U.S. No. 1 Hard Red Winter, ordinary protein rail bid was 3/4 to 5 3/4 cent higher, from $5.66 1/2-$5.76 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 8 to 10 cents higher, from $5.02-$5.03 per bushel. Minneapolis and Duluth U.S. No. 1 Dark Northern Spring, 14.0 to 14.5% protein rail, was 57 3/4 cents lower at $6.32 1/4 per bushel. Portland U.S. Soft White wheat rail was steady to 25 cents lower, from $5.90-$6.05 per bushel.

Vehicle fuel

Refinery maintenance season has hit some unexpected bumps in the road, leading to higher pump prices as the nation settles into spring, according to AAA. New data released from the U.S. Energy Information Administration shows total domestic refinery utilization — a measure of how much crude and other feedstocks refineries use to make various products, including gasoline — fell to 86.4 percent last week when the administration said it was usually at 93 percent. 

The year-over-year difference underscores the impact of unplanned refinery maintenance on markets across the country, including Marathon's 383,000-b/d Los Angeles refinery's Carson facility and the 200,000-b/d McKee refinery in West Texas, which has led gasoline production to tighten. EIA reported that total domestic gasoline production hit 9.8 million b/d last week - down from 10.1 million b/d at the end of March 2018. 

Lower gasoline production and refinery utilization last week contributed to a 1.8 million bbl loss in total domestic gasoline stocks, which now sit at 236.8 million bbl. Until refineries return to normal operations, which will take a few weeks, American motorists should expect pump prices to continue increasing as gasoline demand gains steam. Since Monday, April 1, the national average for unleaded regular gasoline increased four cents to this morning's average of $2.74 a gallon. 

Averages for mid-grade ($3.04) and premium ($3.29) were up even more, with both at least 29 cents higher than what we paid a month ago. Diesel ($3.04), on the other hand, has not fluctuated as dramatically, up just 4 cents from last month, while E85 fuel ($2.39) was up just about 20 cents from last month's rate. 

Natural gas

Natural gas spot price movements were mixed for the seven days ending April 3, according to the U.S. Energy Information Administration. Henry Hub spot prices rose from $2.66 per million British thermal units (MMBtu) last to $2.67/MMBtu over that same period.  

At the Nymex, the April 2019 contract expired at $2.713/MMBtu. The May 2019 contract decreased to $2.677/MMBtu, down 4 cents/MMBtu over the period. The price of the 12-month strip averaging May 2019 through April 2020 futures contracts declined 4 cents/MMBtu to $2.846/MMBtu.
Net injections to working gas totaled 23 billion cubic feet (Bcf) for the period. Working natural gas stocks are 1,130 Bcf, which is 17% lower than the year-ago level and 31% lower than the five-year (2014-18) average for this week.

According to Baker Hughes, for the week ending Tuesday, March 26, the natural gas rig count decreased by two to 190. The number of oil-directed rigs fell by eight to 816. The total rig count decreased by 10, and it now stands at 1,006.

Pizza company stocks

All but one of the four publicly traded pizza brands followed on this site took an early April dip in value last week. The one pizza brand parent company that countered that trend, Yum's Pizza Hut, managed to eke out another 15 cents on its stock price, ending Friday at $99.96 on the New York Stock Exchange. 

But regardless of trading channel, Domino's, Papa John's and Papa Murphy's all lost value. Domino's, which lost $3.54 on the week, closed Friday at $254.56. On the Nasdaq, rival Papa John's also took a tumble down $1.02 to $51.93 at the close of trading. And finally, Papa Murphy's took quite a relative dive last week, dropping 15 cents in value on the week, to close Friday at $5.09. 

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.