Domestic buyers may have difficulty wrestling Cherry away from Chinese buyers. Cherry wood is hundreds of dollars lower than oak.
Amid soaring prices for most species, Cherry has become quite a bargain. All grades of 4/4 Cherry are now priced hundreds of dollars below the equivalent Red Oak, White Oak and Hard Maple items, and are fairly competitive with Soft Maple. With demand for custom cabinets and high-end millwork expanding and end-users trying to control costs, domestic markets for Cherry should show solid growth. Domestic buyers may, however, have difficulty wrestling Cherry away from Chinese buyers. Cherry exports to China doubled in 2012, climbed 65% in 2013, and rose another 94% year-on-year through February 2014.
Prices for 4/4 upper-grade Red Oak have leveled off in most regions and will stay flat for the next 30 days. 4/4 #1 Common Red Oak still has room to rise another $20-30 before it, too, levels off. By mid-June, 4/4 uppers prices will soften, while the common grades stay firm.
All signs point to very strong White Oak sales in the months ahead. Chinese demand is surging; key European markets like the UK and Germany are coming to life; domestic producers of residential and truck trailer flooring need large volumes; and quartersawn stock is moving fairly well to multiple markets. Sawmills will continue to face strong competition for White Oak logs from domestic and foreign barrel stave manufacturers, limiting their ability to increase White Oak production. As such, White Oak lumber prices will continue to firm into June.
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