Article

Traders give Papa John's, cheese producers most Valentine's Week 'love'

Love -- in the form of investor dollars -- was most plentiful during the last Valentine's Week for one turmoil-embroiled pizza brand, as well as many of the nation's cheese producers.

February 18, 2019 by S.A. Whitehead — Food Editor, Net World Media Group

Cheese producers and Papa John's investors ended up getting the most "love" during Valentine's Week 2019, when the price of that key pizza topper increased about 10 cents over the trading week, while encouraged investors raised the overall value of Papa John's stock more than $2 over the week's trading activity.

Cheese

In cheese trading last week, barrels closed at $1.44, while 40-pound blocks ended up at $1.58. The weekly average for barrels was up 10 cents to $1.4240, while blocks gained about 9 cents on the week for an average price of $1.58.

Milk supplies continued to meet cheese making needs in all regions of the country, according to the U.S.D.A. Agricultural Marketing Service. Fewer milk spot loads were reported by Midwestern cheese producers and those prices ranged from $1 to $2 under Class.

Cheese demand is in an ebb-and-flow position with recently increasing market prices. Western contacts suggest that Q4 cheese consumption bettered expectations. However, some also suggested that demand has not been meeting current expectations, and inventories are undoubtedly long.

Midwestern producers reported they are slowing production to manage inventory levels. Some Eastern producers also reported shaving down inventories. Cheese market tones have shown some improvements week over week.

Wheat

Compared to last week, cash bids for wheat were lower, while export inspections for the week ending Feb. 7 totaled 20.6 million bushels of wheat. All export inspection figures were lower when compared to the week prior, according to the U.S.D.A., which also said that sales figures for the week that ended on Jan. 3 included 4.8 million bushels of wheat. 

Wheat was 6 to 15 cents lower overall last week, with Kansas City U.S. No. 1 Hard Red Winter, ordinary protein rail bid, down 14 ¾ cents, from $5.91 1/2-$6.06 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 6 to 9 cents lower, from $5.37-$5.42 per bushel. Minneapolis and Duluth U.S. No. 1 Dark Northern Spring, 14.0 to 14.5 percent protein rail, was 1/4 cent higher at $7.24 ¾ per bushel. Portland U.S. Soft White wheat rail was 8 to 15 cents lower, from $6.20-$6.50 per bushel.

Vehicle fuel

Though winter weather has continued to scale down the demand for gas, according to the American Automobile Association, prices have been inching up from last month across grades, with the average price of a gallon of regular unleaded today at $2.32. That's up 4 cents from last week, and 8 cents over last month. That same trend continued, though not as dramatically across higher grades, with mid-grade today at $2.63 and premium at $2.89.

Diesel fuel, meanwhile, has barely budged in price since last month when it was at $2.93, the same as today, though last year at this time we were paying about 4 cents more per gallon. And E85 was up the most for all grades and types of fuel over last month, coming in this morning at an average of $2.09 a gallon, a full 10 cents higher than last month, but still a penny lower per gallon than the amount we paid for the fuel a year earlier.

Natural gas

Natural gas spot price movements were mixed for the report week that ended Feb. 13, with Henry Hub spot prices rising from $2.56/MMBtu to $2.61/MMBtu over that period, according to the U.S. Energy Information Administration. At the New York Mercantile Exchange (Nymex), the price of the March 2019 contract decreased 9 cents, from $2.662/MMBtu last Wednesday to $2.575/MMBtu over that period. The price of the 12-month strip averaging March 2019 through February 2020 futures contracts declined 2 cents/MMBtu to $2.796/MMBtu.

Net withdrawals from working gas totaled 78 billion cubic feet (Bcf) for the week ending Feb. 8. Working natural gas stocks are 1,882 Bcf, which is 2 percent lower than the year-ago level and 15 percent lower than the five-year (2014–18) average for this week.

The natural gas plant liquids composite price at Mont Belvieu, Texas, fell by 62 cents/MMBtu, averaging $6.24/MMBtu for the week ending Feb.13. The price of ethane, propane, butane, natural gasoline and isobutane all fell, by 9, 9, 7, 3, and 1 percent, respectively.

According to Baker Hughes, for the week ending Tuesday, Feb. 5, the natural gas rig count decreased by three to 195. The number of oil-directed rigs rose by seven to 854. The total rig count increased by four, and it now stands at 1,049.

Pizza company stocks

Publicly traded pizza brands faced a mixed bag of investor interest last week, resulting in a pretty even assortment of ups and downs in brand value over the period. Domino's, for instance, lost $8.51 over the course of trading on the New York Stock Exchange last week, to end Friday at $281.65. Meanwhile, competitor Pizza Hut and its parent, Yum Brands, came out relatively unscathed over the week's activity, ending at just a penny lower than the week before, to settle in at $94.12 Friday.

Over on the NASDAQ, Louisville-based Papa John's continued to gain in value in the weeks following news of its new mega-investor, Starboard Value LP. That brand gained $2.28 in value over the trading week to close Friday at $45.26. Finally, the smaller Papa Murphy's brand also gained some investor interest over last week, ending Friday at $5.32, up 9 cents over the previous week.

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.