January lumber futures contract closes limit-up on Thursday at three-week high of US$241.70/mbf on postive housing construction data
November 18, 2011
– Firming cash prices and better-than-expected housing starts data helped to support a sharp increase in lumber futures prices in Thursday's Chicago Mercantile Exchange trading, according to a report by Dow Jones.
Brokers said improved cash buying from midweek had put conditions in place for a rally, and this, combined with short covering and positive construction figures for October, helped lift the January contract to a three-week high.
Data released on Thursday by the U.S. Commerce Dept. showed housing starts at a seasonally adjusted rate of 628,000, down 0.3% from the previous month but above the 8.1% drop predicted by analysts. Building permits, which indicate future construction activity, climbed almost 11%, driven by a 30% increase in apartment permits.
Apartment construction permits have risen by around 63% in the past year as renting becomes the preferred option for people who have lost their jobs and have been forced to leave their homes, The Associated Press reported.
The January lumber futures contract closed up by the $10 daily limit to reach a three-week high of US$241.70 per thousand board ft. (mbf). March closed $8.30 higher at $258.30/mbf and May settled up $8.60 at $270.60/mbf.
The primary sources of this article are Dow Jones, Chicago, on Nov. 17, 2011, The Associated Press, Washington, on Nov. 17, 2011, and price settlement data from the Chicago Mercantile Exchange.