As 2019 softwood lumber selling resumed following the holiday break, prices of quite a few standard construction framing dimension lumber commodities remained flat while others popped up or dropped down slightly depending in supply and customer inventories in the field. Producers and resellers received plenty of calls for inquiry, but booked much fewer sales as buyers chose to sit back and wait for prices to drop before committing to more purchases. Order files at most sawmills were approximately two weeks, however specialty and custom items were out to the week of January 28. As with the end of 2018, demand for 2×6 sizes remained hot. Prices of that item were strong, at the start of this New Year, with benchmark Western Spruce-Pine-Fir KD 2×6 #2&Btr up $27, or +8.9%, over the end of last year, to US$332 mfbm from $305.
Current Softwood Lumber Prices Compared to Recent and Historical Highs: Jan 2019
As the current contract on the Chicago Mercantile Exchange raced toward the January 15 expiry, trading of softwood lumber futures switched largely to the next session. Current prices on futures reflected a close proximity to cash; always helpful when trying to determine in which direction prices will move in the new few weeks and months. For Thursday, January 11 close, softwood lumber futures ended up $5.50 to settle at US$330 mfbm. The looming March and May contracts were each up-limit, or +$10, to close Thursday at US$346 and US$354 respectively. It remains to be seen, of course, if the cash market will trend upward over the next few months. However, with volumes at almost 3,000, this latest activity on the lumber futures board does indicate a rather bullish attitude on the part of industry.
Most sawmill order files were into the week of January 21st, while 2×6 #2&btr R/L was the standout, booked to the 28th thanks to tight overall supply. — Madison’s Lumber Reporter www.madisonsreport.comwww.madisonsreport.com
Weather provided quite some consternation across the continent, particularly in the Canadian east. Eastern Spruce-Pine-Fir sawmills reported transportation problems, and indicated that most of their business last week came from US customers.
Southern yellow pine lumber prices started this new year in a slump. Prices for the January 11, 2019 issue of Madison’s Lumber Prices matched their 2018 low point that came just three weeks before. Madison’s print on Southern Yellow Pine KD 2×4 #2&Btr — the closest competitor to benchmark WSPF — was US$374, dropping $21 or -5.3%, from the previous week’s US$395.
Not surprisingly, both orders and shipments of southern pine lumber were just under 1 mmbf, which is indicative of the low levels typically seen during this time period each year.
Traders of studs found price levels to deal at and came back to producers to buy small volumes, but overall business was “spotty by geography”. — Madison’s Lumber Reporter www.madisonsreport.comwww.madisonsreport.com
The below table is a comparison of June 2018 and January 2019 benchmark dimension softwood lumber 2×4 prices compared to historical highs of 2004/05: