U.S. Federal Reserve's pledge to hold interest rates near zero until 2014 triggers lumber futures gains on Wednesday and Thursday; March contract climbs US$5.60 over the two days to US$240.90/mbf
January 27, 2012
– Lumber futures edged up during Thursday's trading on the Chicago Mercantile Exchange as traders continued to react to an announcement that short-term interest rates would remain near zero, Dow Jones reported.
The Federal Reserve pledged on Wednesday to hold interest rates near zero until at least late 2014, extending an earlier promise to maintain low rates until the middle of next year.
Commodities markets reacted positively to the news, as low interest rates are likely to help attract buyers, and lumber futures for March delivery gained US$3.40 to close at $238.70 per thousand board ft. (mbf). May settled $5 higher at $255.10/mbf.
On Thursday there was some follow-through light buying and short covering, but overall trading was light and selling interest limited.
March closed up $2.20 at $240.90/mbf and May gained $3, closing at $258.10/mbf. Cash prices were unchanged in a $240-$250 range.
The primary sources of this article are Dow Jones, Chicago, on Jan. 26, 2012 and daily settlement data for random lengths lumber futures from the Chicago Mercantile Exchange.