Lumber Market Direction
Price appreciation finally slowed this week and likely will flatten out with spot discount opportunities as seasonal factors become more prevalent in the softwood lumber market. American lumber businesses were very quiet as the nation pauses for the U.S. Thanksgiving holiday tomorrow. Most extended away time into the weekend and many were out of office by mid-week getting an early start on travel for weekend destinations.
No matter how you look at the market the inventory deficit remains high and order files remain well garnished. Mills will be looking for extended time away by next month, which should translate into price resilience through end of year. Spot year-end discounts will come up, but are expected to be the exception rather than the norm. Housing starts on both sides of the border are improving and export business, while lower, remains steady.
Expect futures to merge steadily back towards cash over the next month. Trading could be far choppier in the new contract than in cash markets as investors trade off of daily swing movements in the contract. Long term, cash markets could be set up for decline by mid to late January, but for now cash remains king.