Lumber

[tsptalk]

Like Copper, lumber continues to make a big move higher. Strong economic indicator, or are we running out of trees? :)

https://www.tsptalk.com/images/mb/071820c.gif

[Tsunami]

That could be a good sign for housing, and the economy in general...

"The movements of lumber futures prices tend to lead corresponding movements in the PHLX Housing Sector Index (HGX), but with a lag time of about 55 trading days."

https://www.mcoscillator.com/learning_center/weekly_chart/lumber_gets_its_mojo_back/

[ravensfan]

Not sure if we are running out of trees, but we are definitely running out of lumber. My last trip to Home Depot (just a week ago) and there wasn't a single piece of pressure treated lumber in the entire store. I have heard lots of people are using this down time for home improvement projects, but come on no pressure treated lumber to be found. And the worst part, the folks working at Home Depot had no idea when they would get the next shipment.

So it is not surprising that lumber continues to move higher...

[Bullitt]

I have two family members in the construction business and they told me that they are swamped this summer.

A few things:

1. Those summer trips were cancelled resulting in more $$ in pockets + stimulus checks. Jobs really started coming in after those checks came.
2. Being home all day people wish they had that deck or pool in their backyard to sit in while chillin' or working (also chillin').
3. Those projects that had been put on hold - those windows that are drafty or don't open so well anymore - being home all day some people just can't stand dealing with it anymore.

I remember two years ago when there were the fires out west and Puerto Rico got wiped out analysts were calling for higher lumber prices going forward. It's possible supply was low in the first place, and logistical disruptions made things worse.

Plywood and pressure treated wood was also used by concerned business owners to board up their shops in big cities during the peaceful protests. I don't blame them. Shutdowns were really in full force then so the shelves were wiped out.

One more thing, slightly related. Both of their businesses took out the loan even though they it turns out they won't need it. Nobody knows the details behind it because the terms seem to change every day, but as it stands now, it's basically a HELOC from the Fed that may be used to expand their businesses for next year. Right now, almost all the jobs are pushed out to May 2021.

[tsptalk]

Lumber is still trying to hold the 50 day average as it looks to break the recent descending resistance line. https://www.tsptalk.com/images/mb/060421b.gif

https://www.tsptalk.com/images/mb/2021/060421b.gif

[James48843]

Lumber is still trying to hold the 50 day average as it looks to break the recent descending resistance line. https://www.tsptalk.com/images/mb/060421b.gif

https://www.tsptalk.com/images/mb/2021/060421b.gif

I gave up on doing any projects this summer- in part because of no builders available, and in part because of the price of lumber. Holding out hope that 2022 will be more reasonable. Cross my fingers- let’s get back to sub $400 board feet.


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[tsptalk]

Lumber futures are trading below the 50-day EMA so far this morning at 1225, down 4.7%. This chart hasn't been updated yet so I drew it in. :)

https://www.tsptalk.com/images/mb/2021/060721b.gif

[tsptalk]

TIMBERRRRR!!!

Keeping up with lumber, which fell to a lower low this morning at 1180.

https://www.tsptalk.com/images/mb/2021/060821b.gif

[tsptalk]

Lumber Prices Are Falling Fast, Turning Hoarders Into Sellers
Prices have dropped from record highs, spurred by the economic reopening and potentially pointing to an eventual return to normalcy


Lumber prices are falling back to earth.

Futures for July delivery ended Monday at $996.20 per thousand board feet, down 42% from the record of $1,711.20 reached in early May. Futures have declined 14 of the past 15 trading days, the last two by the most allowed by exchange rules.

WSJ paysite $$: https://www.wsj.com/articles/lumber-prices-are-falling-fast-turning-hoarders-into-sellers-11623749401?mod=hp_lead_pos3

[bmneveu]

Is this a leading indicator for a decline in housing prices?

[James48843]

It’s at least a little normalcy returning to the markets. Demand is still strong, but supply is at least starting to catch up. That’s good.

Below $1,000. Good.

Lumber at $975 is more digestible than lumber at $1700. Another month and it may be back to almost normal.


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[Bullitt]

Might be time to start watching lumber again. Up over 25% from the August 17 low.

I had the same question about it being a leading indicator, but the best I could come up with is that it takes weeks or months to be reflected in the price of wood. Something like 20% of a homes cost is the wood price.

[tsptalk]

Makes sense. The closing high for the dollar was on Aug 19.

[alevin]

I've had some WY for awhile now, had to hang in through the big drop and back up again. dividends. Right wrong or indifferent-YMMV.

[Bullitt]

Good news on the inflation front.


Lumber prices have fallen to their lowest level in more than two years, bringing two-by-fours back to what they cost before the pandemic building boom and pointing to a sharp slowdown in construction.

Lumber futures ended Monday at $410.80 per thousand board feet, down about one-third from a year ago and more than 70% from their peak in March, when the Federal Reserve began raising interest rates to fight inflation.

https://www.wsj.com/articles/lumber-prices-fall-back-to-around-their-pre-covid-levels-11664239652