Random Length Lumber Futures Trading *repost*

Chicago Mercantile Exchange launched updated futures trading in August 2022 under the ticker LBR

CME Group launched a new lumber futures contract on August 8, 2022. The new derivative is said to feature a more precise hedging acumen and is designed to be more accessible to producers.

The new futures are now sized at 27,500 board feet, characterized by the derivative exchange as “a single truckload to enable more tailored risk management strategies.”

The deliverable species have also been extended to include SPF (stamped SPF), Douglas Fir, Fir Larch, and Hem Fir, which is expected to make the pricing more precise and inclusive.

Research firm IBISWorld estimates the lumber wholesaling industry at around US$200.8 billion for the year, sporting a 14.2% annualized market size growth from 2017 to 2022.

Options on the new lumber futures will also be launched on the same day. Minimum price fluctuation is set at US$0.10 per mbf (US$2.75 per contract).

The futures are set to trade on CME ClearPort and CME Globex, under the code “LBR”.

(this is a repost, originally published on July 12, 2022)