The latest Market Talks covering Commodities. Published exclusively on Dow Jones Newswires throughout the day.
1554 ET - Oil futures settle higher following five sessions of losses, with WTI rising 1.8% to $92.16 a barrel and Brent up 3.9% to $103.08 a barrel. U.S. weekly inventory data were seen bearish for oil as crude stocks rose by 3 million barrels, putting inventories 2% above the five-year average. Product stocks remain tighter, with gasoline inventories 6% below average for the time of year and distillate stocks 12% below average. "Ironically, the only bearish distillate data in today's report was distillate exports down 283,000 barrels a day to a nearly three-month low of 1.331 million barrels a day," Mizuho's Robert Yawger says in a note. The report came as the Trump administration is considering a diesel export ban to lower domestic prices. (anthony.harrup@wsj.com)
1539 ET - Natural gas futures post back-to-back gains with the October contract settling above $3 per million British thermal units after numerous failed attempts recently. With the market in a shoulder month, moves to $3 tend to prompt a pullback, says long-time natural gas trader John Woods. "Every time you get up there you take some profit because you don't want to be long, even at $2.95 and above because you have no push after that," he says. "This pattern has been going on for a good month." Nymex gas settles up 2% at $3.023/mmBtu, its highest close since July 8. (anthony.harrup@wsj.com)
1516 ET - U.S. diesel futures fall as the market weighs news that the Trump administration is considering implementing restrictions on diesel exports. Secretary Chris Wright hinted at a voluntary cap, rather than ban in a WSJ interview. An export ban could create more problems than it solves, says Phil Flynn of the Price Futures Group in a note. Exports are an outlet for U.S. Gulf Coast refiners to keep running hard, he says. "Cut that outlet and storage fills up. Then they cut runs...they don't just make less diesel--they make less gasoline and jet fuel too. That's how you turn a diesel problem into a broader fuel problem." The key to solving the diesel issue is a Russia-Ukraine ceasefire and an end to broader refining disruptions overseas, he adds. Front-month Nymex diesel settles down 3.4% at $4.7764 a gallon. AAA reports the current average price at $6.5217 a gallon, near a record high. (anthony.harrup@wsj.com)
1509 ET - Live cattle futures on the CME settled up 1.2% to $2.22175 a pound, resuming an upward trend seen in cattle futures in the past month. Cattle has been gradually pushing higher after finding a low around $2.10 a pound in early September. That comes even though the U.S.-Mexico border has been gradually reopening after being closed in an effort to control the spread of New World screwworm. Cattle is also trending higher ahead of Friday's Cold Storage report from the USDA. Lean hog futures settle the day down 0.9% to 70.375 cents a pound. (kirk.maltais@wsj.com)
1441 ET - McDonald's doesn't expect the challenging environment from the past few years to change in the near future, Chief Executive Chris Kempczinski says on CNBC. He expects traffic in the fast-food industry will remain flat and inflation will stay elevated going forward. "We need to stop talking about that being a difficult environment and just say that is the environment, because as we look out forward, we're not expecting things to change," he says. To grow, Kempczinski says McDonald's needs to focus on gaining share from competitors. His focus is increasing share for chicken and beverages, he says. McDonald's falls 5%. (katherine.hamilton@wsj.com)
1417 ET - A potential plan to implement restrictions on diesel exports may have implications for farmers harvesting crops. Energy Secretary Chris Wright hinted at a voluntary cap, rather than ban in a WSJ interview. On one hand, it could make diesel cheaper for farmers in the Midwest and Gulf Coast, says Jim Wiesemeyer of Ag Bull, citing research from the Atlantic Council. "Farmers buying fuel during that period could benefit, although savings would depend on local delivery prices and purchase timing," he says in a note. But on the other hand, it could lead to refineries lowering their throughput with could actually raise prices, says Wiesemeyer. CBOT grain futures are lower, with corn down 1.3%, soybeans off 0.6%, and wheat 1.4% lower. (kirk.maltais@wsj.com)
1401 ET - Gold futures fall for a third straight session as the U.S. dollar strengthens and Treasury yields rise, including the 10-year yield at its highest level since July 2007. Fed officials have reaffirmed support for last week's interest-rate increase while warning of inflation risks, sustaining odds above 50% of another rate increase in October, Critical Metals' CEO Tony Sage says in a note. "A firmer U.S. dollar and elevated U.S. yields could also continue to keep pressure on bullion." Front-month gold falls 1.3% in New York to $4,281.30 a troy ounce. Silver settles down 2.4% at $64.382 a troy ounce. (anthony.harrup@wsj.com)
1240 ET - Last week's unexpected increase in U.S. crude oil stockpiles as exports fell and refineries cut runs is "slightly bearish" for crude, but keeps upward pressure on gasoline prices, says David Russell of TradeStation. "Energy markets are tight but stabilizing," he says, "but it might be hard for crude to go much lower, given the record crack spreads." The EIA reported a 3 million barrel increase in crude oil stocks, leaving them 2% above the five-year average for the time of year, while gasoline inventories fell by 1.7 million barrels and were 6% below the average. WTI crude is up 2.1% at $92.41 a barrel after falling the previous five sessions. Nymex gasoline futures are up 1.4% at $3.5367 a gallon. (anthony.harrup@wsj.com)
1219 ET - Darden Restaurants' overall visits climbed 3.4% year-over-year during the latest quarter, Placer.ai data shows. The gain comes in contrast to the broader full-service dining industry, where visits fell 0.8% over the same period, the location-analytics company says in a recent report. Each of Darden's restaurant brands compete on value through different means, Placer.ai says, with Olive Garden offering abundance, LongHorn Steakhouse offering pricing against groceries and Cheddar's Scratch Kitchen offering everyday affordability. Each brand's value proposition is paying off, as all three posted overall visit gains in every month from April to August, according to the report. Darden is expected to report quarterly earnings ahead of Thursday's opening bell. (connor.hart@wsj.com)
1214 ET - Cracker Barrel says its lower-income customers continue to pull back on eating out while higher-income guests are holding up, echoing a trend seen throughout much of the economy. "I think a lot of folks have reported that, and that's the relationship that we see," finance chief Craig Pommells says during a call with analysts. Pommells says the company's value equation should help it maneuver that environment. Cracker Barrel's average check is around $16, compared to $27 in the casual dining industry as a whole, he says. Other offerings, like a daily pancake special for $7.99 and its loyalty program, should also position the company well, he says. "If you're feeling pressured from a discretionary income perspective, there are a lot of ways you can still have a great experience at Cracker Barrel," he says.(kelly.cloonan@wsj.com)
1209 ET - Cracker Barrel's new CEO David Deno says he's most focused on improving two key areas at the restaurant chain: food and the customer experience. Deno says he's honing in on Cracker Barrel's dinner offerings with upgrades to its chicken, hamburger and steak, working to boost food quality while making it more craveable. "These changes are all about increasing guest satisfaction and not about taking out costs," he says during a call with analysts. In the company's retail shops, he plans to simplify product layouts and widen aisles, and he's also looking to increase personalization in its loyalty program. He says the company has already made impressive gains across key customer satisfaction metrics, and is confident it can make more improvement. (kelly.cloonan@wsj.com)
1203 ET - Cracker Barrel's new CEO David Deno is standing by a strategy put in place by his predecessor, saying the company went through a rough patch and came out stronger. Deno joined Cracker Barrel last month, succeeding Julie Masino, who oversaw a controversial rebranding campaign that sparked widespread backlash before walking back much of the strategy. The business started showing signs of improvement before her exit. "The results of the past couple of quarters speak for themselves," Deno says during a call with analysts. "We will accomplish our objectives by relentlessly executing against the priorities we have identified." Deno says he's working to finetune the company's focus on food and customers, with plans to improve its dinner offerings and store merchandising, among other areas.
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