Prices for lumber futures contracts, which surged in July and August, are dropping from those 30-month peaks. But with softwood lumber trade agreement between Canada and the U.S. expired, Canadian lumber producers are said to be flooding the U.S. market with lumber and panel - challenging U.S. mills.
Lumber Futures Prices from Barchart
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Lumber is traded in commodities exchanges future contracts, just like corn and soybeans, but the years-long growing cycle means prices tend to be less volatile.
Right now lumber futures are running at more than $320 per thousand board feet, and up, for 1,000 board feet delivered in July - as shown in this chart from Barchart. Home construction's recent good news - April 2015 new housing starts jumped 20%, and the March figures that had look lukewarm were adjusted upward - means there will be upward pressure on the price of wood.
| Canadian Lumber Exports by Region | |
| Region | Exports (fbm) |
| BC Coastal | 61,610,365 |
| BC Interior | 574,627,836 |
| Alberta | 149,273,975 |
| Saskatchewan | 20,408,307 |
| Manitoba | 1,133,856 |
| Ontario | 91,560,102 |
| Quebec | 173,801,065 |
| Maritime Total | 104,061,851 |
| Excluded Companies | 43,093,812 |
| Total: | 1,219,571,169 |
About 20 percent of U.S. lumber and logs are exported to China; and about 40 percent of lumber is consumed in home construction. Much of the remaining wood is absorbed in furniture and cabinetry for those homes - so the price of lumber rides in tandem with the volume of housing starts.
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