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In the run-up to Super (pizza) Bowl, commodity winners, losers emerge

The winners and losers were evident in the commodities report this week, as it was split right down the middle. Half the brands watched here weekly gained stock value and half lost, while half the pizza commodities Pizza Marketplace monitors gained in price, while the other half dropped.

January 28, 2019 by S.A. Whitehead — Food Editor, Net World Media Group

With what many pizza brands call their biggest sales event of the year, Super Bowl Sunday, hurdling toward us, pizza operators saw both higher wheat prices and a slight rise in gas for all those delivery vehicles they'll be dispatching, come Sunday. But, those higher rates were balanced in some part by lower cheese and natural gas prices last week, when pizza stocks were also split into winners and losers for the trading period. 

Cheese

Cheese prices were down on average over last week's trading, with the weekly average for barrels off 4 cents at $1.17, while the average for blocks came in at $1.38, off 3 cents. At the close of trading for the week, barrels were $1.18 and 40-pound blocks were $1.3900.

The U.S.D.A. Agricultural Marketing service reports that overall cheese markets are "flummoxed," with 2019 ushering in a tumultuous time for barrel markets. In fact, the association reports that barrel prices last registered at current midweek price points at or around $1.16, almost 10 years ago on July 23, 2009. 

Cheese demand is steady to lower nationwide, with northeastern customer bases either experiencing or expecting severe winter weather and downsizing orders from Midwestern cheese makers, particularly pizza cheese producers. But western mozzarella producers continued to report healthier orders. 

Production activity was mixed, as well, with active production on the coastal regions tapering for the middle of the country, where some cheese plant managers suggest they are at their lightest workweek in years. Other producers in the Midwest suggest they are back to normal production schedules. 

Wheat

Compared to the previous week, cash bids for wheat were higher last week, according to the U.S.D.A. Missouri Department of Agriculture Market News, which reported that wheat ranged from 1 to 41 cents higher overall.  

Kansas City U.S. No. 1 Hard Red Winter, ordinary protein rail bid was 7 1/2 cents higher, from $6.21 1/2-$6.36 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 1 to 7 cents higher, from $5.52-$5.53 per bushel. Minneapolis and Duluth U.S. No. 1 Dark Northern Spring, 14.0 to 14.5 percent protein rail, was 34 1/4 to 41 1/4 cents higher at $7.06 1/4 per bushel. Portland U.S. Soft White wheat rail was 5 to 10 cents higher, from $6.15-$6.45 per bushel.

Vehicle fuel

The American Automobile Association reports that gas demand rebounded last week, and prices inched up over last week for the first time in a while as testament to that fact. Regular today averaged $2.26 a gallon, up a cent over last week, but still lower than the $2.29 we paid a month earlier. Mid-grade ($2.59) and premium ($2.84) followed suit with the same trend. 

Diesel, however, was running $2.92, which is flat from the previous week, but 9 cents lower than last month. E85 was actually 1 cent higher than a month ago, coming at $2.03 today, which was also 5 cents higher than just a week ago. 

Natural gas

Natural gas spot prices fell at most locations for the report week that ended on Jan. 23, according to the U.S. Energy Information Administration. Henry Hub spot prices fell from $3.61 per million British thermal units (MMBtu) last Wednesday to $3.10/MMBtu yesterday.

At the Nymex, the price of the February 2019 contract decreased 40 cents, from $3.384/MMBtu to $2.98/MMBtu over that same period. The price of the 12-month strip, averaging February 2019 through January 2020, futures contracts declined 5 cents/MMBtu to $2.917/MMBtu.

Net withdrawals from working gas totaled 163 billion cubic feet (Bcf) for the week ending Jan. 18. Working natural gas stocks are 2,370 Bcf, which is 1 percent more than the year-ago level and 11 percent lower than the five-year (2014-18) average for the week.

The natural gas plant liquids composite price at Mont Belvieu, Texas, rose by 5 cents/MMBtu, averaging $6.51/MMBtu for the week ending Jan. 23. The price of natural gasoline fell by 2 percent. The price of ethane and butane rose by 2 percent, and the price of propane rose by 1 percent. The price of isobutane remained flat week over week.

According to Baker Hughes, for the week ending Tuesday, Jan. 15, the natural gas rig count decreased by four to 198. The number of oil-directed rigs fell by 21 to 852. The total rig count decreased by 25, and it now stands at 1,050. This is the largest week-over-week decrease in total rig count since February 2016.

Pizza stocks

As Super Bowl, a.k.a. Super Pizza Sunday, nears, traders were busy on the stock exchanges last week, buying and selling shares and giving half of the brands monitored here weekly good news, while the other two brands had less to celebrate. 

In the winners' column, Domino's had another straight week of gains, rising $16.70 over the trading week on the New York Stock Exchange to close Friday at $284.16. Meanwhile, the parent company of competitor, Pizza Hut, also had something to celebrate, as the NFL's official pizza sponsor closed the week up 35 cents to finish at $92.71 Friday. 

Losers on the week, included Papa John's, which closed down 68 cents Friday from the previous week's close to finish at $42.18. Meanwhile, take-and-bake brand, Papa Murphy's finished out down 6 cents to close out the week at $4.70. 

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.