Lumber futures buyers retreat as financial leaders discuss Eurozone rescue package at Brussels summit, November contract drops US$2.80 on Tuesday and US$0.40 on Wednesday to US$220.30/mbf
October 27, 2011
– Lumber futures closed mixed on Wednesday after sharp drops on Tuesday on concerns about Europe's debt crisis, Dow Jones reported.
Many commodity markets moved lower after 27 finance ministers in Europe canceled a Tuesday morning meeting ahead of a summit in Brussels to discuss a rescue package for the Eurozone. This led to concern that a deal would not be reached by the Wednesday deadline, creating uncertainty in currency markets.
The November lumber futures contract dropped US$2.80 to $220.70 per thousand board ft. (mbf) on Tuesday, and January closed down $5 at $230.20/mbf. Cash prices were quoted in a $233-$238 range.
On Wednesday, buyers stayed on the sidelines as they watched developments in Europe and continued to worry about limited lumber demand in the U.S. Short position holders took profits in January after Tuesday's drops in that contract, while a stock market rally helped to limit losses.
January climbed $3.30 to $233.50/mbf, while November dropped $0.40 to $220.30/mbf. Cash prices were quoted in a $230 to $235 range.
Eurozone leaders eventually announced a rescue deal in the early hours of Thursday morning that boosts the European Financial Stability Facility to €1 trillion, and requires European banks to raise €106 billion, including €30 billion in Greece.
The primary sources of this article are Dow Jones, Chicago, on Oct. 25 and 26, 2011, and The Telegraph, London, on Oct. 27.