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
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|
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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