Softwood Lumber Futures At a $45 Premium to Cash Prices: Jan 2019

Softwood Lumber Futures At a $45 Premium to Cash Prices: Jan 2019

For the other large volume-traded softwood lumber commodity, this week’s Southern Yellow Pine East Side 2×4 #2&Btr KD prices are down $126 (-24.85%) relative to the 1-year rolling average price of US$507 and down $99 (-20.63%) relative to the 2-year rolling average price of US$480 mfbm

SOURCE: Madison’s Lumber Reporter www.madisonsreport.com

Canadian and US construction framing dimension softwood lumber wholesaler prices waffled last week as the supply-demand balance was very level at both suppliers and customers. The wood that was traded once again was for immediate fill-in needs only. No one is stocking inventory right now. Lumber futures shot up-limit ($15) for the Jan 15 close and have not looked back since.

Current Softwood Lumber Prices Compared to Recent and Historical Highs: Jan 2019

Business was mostly quieter as buyers settled down after last week’s curtailment-generated mini-frenzy. — Madison’s Lumber Reporter

www.madisonsreport.com

For the kiln-dried Hemlock/Fir products, a combination of steady demand and winter-hampered log supply boosted that market position. Sales of dry Doug-fir were especially strong, as buyers from both sides of the continent offered little resistance to increased asking prices when putting in orders to replenish their waning inventories. Mill order files were “where sawmills wanted them”, which ended up being from two- to four-weeks out depending on the source and item.

Orders have been increasing yet winter weather “just getting started”, thus shipping woes became more of a concern with each passing day. Arrival times were only delayed by one to two weeks but players expect to get more transportation-based headaches in the near future.
Below is a graph of the highest volume, or benchmark, North American panel prices from January 2007 to January 2019.

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:

SOURCE: Madison’s Lumber Reporter www.madisonsreport.com

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