Prices for lumber futures contracts are beginning to rise, after drifting downward for months. China's building contraction and the winter hiatus knocked down prices, but they could jump dramatically, say analysts, as U.S. homebuilding surges.
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 about $270 per thousand board feet, 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.
About 20% of U.S. lumber and logs are exported to China; and about 40% of lumber is consumed in home construction. Much of the remaining wood is abosrbed in furniture and cabinetry for thsoe homes - so the price of lumber rides in tandem with the volume of housing starts.
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