Demand for Hickory from residential flooring factories in the U.S., China and Mexico has expanded so quickly that producers are no longer able to keep up. U.S. Hickory exports rose 34% in 2012 and 16% in 2013, but were down 1% year-to-date through Mar 2014—entirely due to lack of supply.

Supply will further tighten this summer as mills hold down production to avoid stain. Even so, Hickory prices won’t accelerate as rapidly this summer as they have in recent months since they are already at historic highs and markets won’t bear another surge.

Markets for 4/4 FAS/1F and 4/4 #2&3A Common red oak will take on a softer feel over the next 30 days, as distributors and end-users in North America and abroad grow more comfortable with in-house inventories and more confident they’ll be able to source more when needed. FAS/1F prices will slip everywhere except the North, while #2&3A Common declines will extend to all regions.

The gap between 4/4 #1 Com red oak supply and demand has not fully closed, but it will by mid-year, causing prices to level off. Importantly, underlying international demand for red oak is still quite strong, and domestic markets are improving, so prices aren’t likely to fall too hard.