Economist Analysis of Current Lumber Market

Economist Analysis of Current Lumber Market

Below are some cogent thoughts on the current lumber market today, from an economist at Seeking Alpha:
https://seekingalpha.com/article/4291207-lumber-sits-waits-wood-follows-price-futures

Softwood Lumber Movers & Shakers: green and KD Construction Framing Dimension Lumber Prices 2007 - AUG 2019
www.madisonsreport.com

Lumber is just below its midpoint for 2019“, Seeking Alpha.

So far in 2019, the price of nearby lumber futures has traded on the Chicago Mercantile Exchange in a range from US$286.10 to US$453.90 per 1,000 board feet.
At US$374.50 on September 12 on the nearby November contract, the price of the wood futures was a bit above the midpoint for this year which stands at US$370. https://seekingalpha.com/article/4291207-lumber-sits-waits-wood-follows-price-futures

The current daily chart shows the price of November lumber had been falling from the August 28 high at US$379.30, probed below the US$350 level and turned higher moving to just shy of the US$390 level on September 11. Open interest at 1,971 contracts has been dropping, and it was at the lowest level since 2003, indicating a lack of interest in the wood market.
The price momentum indicator is rising above a neutral reading. Relative strength at just under the 60 level is at the upper region of a neutral condition.
Daily historical volatility at 35% just rose from the lowest level since mid-July.

Technical support for the November contract stands at the July 17 low at US$326 per 1,000 board feet with resistance at the US$405 level, the June 18 high. — Seeking Alpha

The price of wood hit an all-time peak in 2018 and collapsed

Lumber futures embarked on a wild ride to the upside when it hit rock bottom at US$214.40 in September 2015. Before 2015, the all-time peak in the lumber market was at US$493.50 in 1993.
SOURCE: ttps://seekingalpha.com/article/4291207-lumber-sits-waits-wood-follows-price-futures

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