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(Lucky) dog days of August: Pizza stocks up, commodities down

(Lucky) dog days of August: Pizza stocks up, commodities down

The "balance sheet gods" smiled on pizza restaurateurs last week when all three major publicly traded pizza companies saw their stock values climb on the Nasdaq and New York Stock Exchange after all three had also turned in their Q2 financial results. And the gifts kept coming last week for pizza purveyors big and small, as prices for most of the sector's most essential commodities fell, offering a form of balance sheet booty to operational costs. 

Cheese

Weekly averages for cheese that traded on the Chicago Mercantile Exchange last week were up, with 40-pound blocks nearly 5 cents higher at $1.87, while barrels averaged just a fraction of a cent higher on the week. Block closed at $1.87, while barrels finished the week at $1.72, according to the U.S.D.A. Agricultural Marketing Service. 

Though the week started off slow in cheese trading, more reported prices at higher premiums trickled in mid-week. Reported spot milk were up and actually higher than they have been in the last two years for this time annually. Meanwhile, cheese production is steady to busy throughout the nation, with demand greatest in the Midwest, though somewhat sluggish in the West. But generally, the U.S.D.A. said national cheese markets remain "steadfast." 

Wheat

Compared to last week, cash bids for wheat were 20 cents lower to 22 cents higher. Kansas City U.S. No. 1 Hard Red Winter, ordinary protein rail bid was 2 3/4 cents higher, from $5.13 1/2-$5.23 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 14 to 22 cents higher, from $4.94-$5.03 per bushel. Minneapolis and Duluth U.S. No. 1 Dark Northern Spring, 14.0 to 14.5 percent protein rail, was 17 1/2 cents lower to 7 cents higher, from $5.95 1/2-$6.01 per bushel. Portland U.S. Soft White wheat rail was steady to 20 cents lower, from $5.75-$6 per bushel.

Vehicle fuel

The U.S. Energy Information Administration showed in its last report that gasoline stocks grew by a comparatively huge 4.4 million bbl (barrels containing 42 gallons each) last week, though gas demand grew only slightly, from 9.55 million b/d to 9.65 million b/d. As a result of these growing stock levels, pump prices dropped last week, even though demand remains strong, according to the American Automobile Association.

In its weekly summary, AAA said that if total domestic stocks continue to outpace demand, American business users of oil-derived fuel will — along with all U.S. motorists — likely continue to see pump prices drop this summer. 

The average price for a gallon of regular today was $2.65, down 6 cents from a week ago and 14 cents from just last month. The price is even a hefty 21 cents less than what we were paying last year at this time. And though the prices for mid-grade ($2.98) and premium ($3.24) were not as dramatically lower, they were also following that downward trend. 

The prices for diesel and E85 have fallen though not as dramatically, with the average price of diesel today at $2.97, about 2 cents lower than last month and 3 cents lower than the previous year. E85 averaged $2.31, which is 6 cents lower than the previous week and 13 cents lower than last month. 

Natural gas

Natural gas spot prices fell at most locations the seven days that ended on Aug. 7. Henry Hub spot prices fell from $2.23 per million British thermal units (MMBtu) to $2.12/MMBtu over that period, according to the U.S. Energy Information Administration.

At the New York Mercantile Exchange (Nymex), the price of the September 2019 contract decreased 15 cents, from $2.233/MMBtu last Wednesday to $2.083/MMBtu yesterday. The price of the 12-month strip — averaging September 2019 through August 2020 — futures contracts declined 12 cents/MMBtu to $2.304/MMBtu.

Net injections to working gas totaled 55 billion cubic feet (Bcf) for the seven days that ended Aug. 2. Working natural gas stocks are 2,689 Bcf, which is 15% more than the year-ago level and 4% lower than the five-year (2014-18) average for this week.

The natural gas plant liquids composite price at Mont Belvieu, Texas, rose by 32 cents/MMBtu, averaging $4.39/MMBtu for the seven days ending Aug. 7. The price of natural gasoline fell by 1%. The price of ethane, butane, and propane rose by 25%, 16%, and 9%, respectively. The price of isobutane remained flat week over week.

According to Baker Hughes, for the week ending Tuesday, July 30, the natural gas rig count increased by two to 171. The number of oil-directed rigs fell by six to 770. The total rig count decreased by four, and it now stands at 942.

Major pizza brand stocks 

As previously mentioned all three major pizza brand companies' stock values rose in value last week, as investors showed confidence heading solidly into the third quarter with Q2 financial reports at their backs. Domino's Pizza, Inc. (DPZ) rose $3.09 over the course of the trading week to close Friday at $247.83 on the New York Stock Exchange.

Meanwhile over on the NASDAQ at brand-on-the-mend, Papa John's International, Inc. (PZZA) the stock value rose $2.11 over the trading week to close at the bell Friday at $46.02. Finally, back on the NYSE, Pizza Hut parent brand, Yum Brands finished up trading Friday at $119.02, up $1.68 over the previous week's closing price of $117.34.

Photo: iStock


Topics: Delivery, Equipment & Supplies, Fast Casual Executive Summit, Financial Management, Food & Beverage, Mobile Payments / Commerce, Pizza Ingredients, Restaurant Franchising & Innovation Summit, Trends / Statistics

Companies: Papa John's, Yum! Brands, Pizza Hut, Domino's


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