May, July, lumber futures edge modestly higher from seven-month lows on April 15, traders wary of 1 point rise in builder confidence index in US market for new single-family homes after prolonged delay to spring pick-up in lumber demand
April 16, 2014
(Industry Intelligence Inc.)
– Lumber futures prices edged modestly higher in Chicago Mercantile Exchange trading on Tuesday, April 15, after prices reached seven-month lows, according to a commentary by The Wall Street Journal.
Cold, wet weather in parts of the U.S. has delayed the seasonal upturn in homebuilding, and analysts say some job sites have not yet restarted major activity. The slow start to the season is impacting demand for lumber, and prices continued to slide on the week's first day of trading, with May settling down $4.80 on the day at $323.50/mbf, July down $6.10 to $315.90/mbf and September closing $6 lower at $329.00/mbf.
On April 15, futures edged narrowly higher on short-covering, although traders reacted cautiously to the latest homebuilding indicator from the National Association of Home Builders, which recorded a 1 point rise in builder confidence in April in the U.S. market for new single-family homes, to a seasonally adjusted reading of 47. A reading below 50 on the NAHB/Wells Fargo Housing Market Index means more builders see conditions as bad rather than good, and The Wall Street Journal noted that the report follows a series of indicators this year that have recorded lower-than-expected results.
In a statement, the NAHB's chairman Kevin Kelly noted that builder confidence has been in a holding pattern the past three months. He said builders were expecting sales prospects to improve in the months ahead as the spring home buying season gets into full swing and demand increases.
CME lumber futures for May delivery edged US$0.70 (0.2%) higher to $324.20/mbf at the close of trading on April 15, July futures settled up $3.70 at $319.60/mbf. Futures for September delivery dipped $1.00 to $328.00/mbf.
The primary sources of this article are The Wall Street Journal, New York, on April 15, 2014, and random lengths lumber futures settlement data from the Chicago Mercantile Exchange. The original article from The Wall Street Journal can be viewed here.