Random Lengths framing lumber composite moves US$3 higher to US$263/mbf on carry-over business, but sales pace winds down from Tuesday
November 27, 2011
– The Random Lengths framing lumber composite moved US$3 (1.15%) higher to $263 per thousand board ft. (mbf) in the short week to Wednesday, Nov. 23, before markets closed for the Thanksgiving holiday.
The composite has increased for three straight weeks, but last week’s reported price was $14 (5.50%) lower than the level at this time last year of $263/mbf, according to Random Lengths' weekly market report.
Sales cooled after the strong pace of the week ending Nov. 18, but carry-over business continued to push prices higher before the market entered holiday mode from Tuesday. The reported price of KD Western SPF #2&Btr 2x4 random finished $5 (2.14%) higher on Wednesday at $239/mbf, but was $34 (12.45%) below the price reported at this time a year ago of $273/mbf.
The sharp increases in lumber futures prices seen in the week ending Nov. 18 failed to carry over into last week’s trading. After settling at $247.50/mbf on Friday, Nov. 18, the January contract reached an eight-week high of $254.00/mbf during last Monday's trading session before losing ground. The declne was largely a result of profit-taking, and concerns that talks on measures to cut the U.S. deficit would end without an agreement. January settled at $246.50/mbf on Monday and the decline continued into Tuesday, when January closed down $4.90 at $241.60/mbf.
Futures continued to drop on Wednesday as concerns about the world economy led to a broad sell-off in commodities and equities. Some traders shed long positions ahead of the Thanksgiving holiday, according to a report by Dow Jones, while slow cash sales contributed to a lack of buying interest. January dropped $5.30 to $236.30/mbf and the March contract closed $4.40 lower at $225.40/mbf.
Futures trading resumed on Friday, but trading was limited, and this, combined with continued weakness in equities markets, took January to a six-day low. The January contract ended the week down $1 at $235.30/mbf, while March dropped $0.20 to $255.20/mbf. Cash prices were reported in a $235-$240 range.
Prices of Eastern SPF prices were flat or up on modest follow-through from the week before, and the reported price of Eastern SPF (delivered Great Lakes) #1&2 2x4 random gained $5 (1.56%) to reach $326/mbf. But this was $34 (9.44%) below the year-ago price of $360/mbf.
Southern pine sales followed a similar pattern, making gains but at a slower rate than the brisk pace of the week before, reported Random Lengths. Gains of up to $10 were reported, but prices on most lengths gained around $5.
The reported price of KD Southern Pine (Westside) #2x4 Random climbed $4 (1.40%) to $289/mbf, and was $17 (6.25%) higher than the price reported this time last year ($272/mbf).
In Douglas fir markets, sales slowed after the previous week’s heavy purchasing, but prices moved higher, helped along by momentum from the previous week and extensive curtailments. At Portland-rate mills, quotes on Std&Btr 2x4 were in a $220-230 range on Tuesday, and the reported price was $225/mbf on Wednesday, up $3 from the previous week, but down $10 (4.26%) from the price reported at year ago of $235/mbf.