Faster kiln turns and seasonally slower exports have pushed more kiln-dried 4/4 FAS/1F and 4/4 #1 Com red oak into warehouses, temporarily elevating supplies. However, an unusually wet summer has held down green production and kept drying operations from building air-dried inventories behind the kilns, thereby reducing the urgency to discount kiln-dried prices in order to prevent larger surpluses in the fall.
We had previously forecast 2-3% declines in kiln-dried 4/4 #1/Btr red oak prices in late summer/early fall, but we now expect declines to be in the 1-2% range. All of this assumes that Chinese purchases resume at record or near-record levels in Sept/Oct.
Sustained growth in domestic and international demand for poplar kept prices firm into mid-summer. U.S. poplar lumber exports in June 2013 reached an all-time monthly record of 28.5 million board feet. Contacts reported slower poplar exports to Europe and Asia in July, which has led to temporary buildups of upper-grade stock.
The near-term outlook for white oak is quite good. White oak shipments to Europe were up 1% YTD through June, compared to an 8% combined decline in other species. During the next several months, European markets for white oak will show more life as economic activity and consumer confidence improve. White oak exports to both China and Vietnam were down 19% through June, largely due to reduced common-grade availability for export. Sustained strong demand from U.S. residential flooring plants will limit fall increases in white oak exports to these Asian giants.
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