The lumber futures market is used by companies of all sizes to manage their risk, predict future prices and hedge against increases. There are huge changes taking place in the lumber futures markets that will change the way they are traded, what is traded and how it is delivered. In this video I explain what these changes are and how they may impact lumber prices going forward.
#Lumber #lumberprices #lumberfutures
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42 Comments
Agreed, thanks for this 👍
The only thing that never changes is all the blah blah blah that plagues us before the title of the video is addressed. PLONK!
Stud wood is cheap but idk whats going on with 2x12s. Home Depot went from 10.32 per 8ft board in Feb. to nearly 20 now in June. Everyone keeps talking about the calming market but the year I go to build garden boxes and they double in price.
30 seconds of good info and the rest was wasteful froth
Dave,
I have never seen a change that lowered the prices of commodities such as wood, lumber, drugs, food. What it seems to me anytime corporations along with government makes a change in operations it is bad for the consumer. What usually happens, and here you are right, but only momentarily as their actions to stabilize cost turns into the opposite. Look at all the things that have occurred in the past that not only didn’t help but in the long run made things much much worse. Let’s take banking when Hamilton and Washington decided to create a federal banking system, that system has never did anything but make the oligarchy more money and help the federal government intrude into our lives. We have had these financial crises evolve into ever more government control. After or really during these financial bust government has grabbed more control without solving the problem. We will continue down this road unless people learn to take individual responsibility for themselves and their families. I know this is getting a bit long but please let me make my case. Another item that government did in the context of protecting the average person when they stop working whether age, mental, or physical related. Good old Social Security the which we all know today is a Ponzi Scheme legitimized by the government. Now that government controls all our SS taxes it is using that to gain more power. I am 76 years old and the government has consistently used that leverage to frighten people who depend on the largeness of the federal government to exist. Look at the federal debt that the government has that has forfeited our freedoms for an existence that everyone except the few will benefit.
There should be protection for the homeowners if the price goes up so the contractor can't raise the price on you
The brokers are making bank on lumber
Most construction are 2×6s for the walls more insulation
Can’t afford to buy lumber anymore
👍👍👍
(I suspect you meant to put "bfm" on the chart, or just "bf.")
I think you're right. Even if something happens due to the different negotiating posture vis transportation, that's only going to cause a minimal price shift. Which could go in either direction, honestly. That's the only thing I can think of. Seems like this is going to be an upgrade.
Betting the Canada wildfires drive them back up
Starts at 4:30
what the cme is looking for is a base price in which various lumber prices can trade at a premium to or discount to like the wheat or oil contracts.there are several types and grades of all commodities all over the world.hedging risk should hold with discounts and premiums of that base contract price although real world skews occur.i started as a runner at the chi merc and the lumber pit was 5 guys
The global money people having greater power in lumber was the end goal. They tend to stabilize things. But being the top 3%, expect billions for doing that. So tree growers, lumber Jack's, saw mills, big box store employees will all have thier wages decrease so consumers can consume and the capital groups turn record profits and stocks show profits every quarter for investors. Look at the 50 year stock history of all commodities.
Sadly for the consumer the declining lumber prices are rarely seen the box box stores. It makes better since from the retail store prospective to donate their high cost lumber to places like habitat for humanity then slash prices and take a loss. That way they can claim higher tax write off.
Seems as if this will be good for the buyer, as transportation costs (i.e. fuel, wages) are rising. This would have a locking effect on the cost of transportation. If you're buying futures at 6 months or 1 year in the future, transportation is not likely to be lower than it is now. Just another way to hedge against inflation.
What am I misunderstanding here? So for ex. Im on the west coast & if lumber mills here are closing as you say (which makes no sense). If local homes are built w/ local resources like douglas fir, it will stilll be taken here, but now shipped to chicago, then shipped back to here, then made available to public (lowes or home depot). How is that a good thing?
In addition, the contracts my now be a quarter of the size making it more accessible. However the cost (tick size) per mbf is (x5) times the cost. Add the supply chain issues w/ other trends that are becoming common recently, I am having a hard time understanding your logic here?
Yea, but is the price of plywood ever coming back down? Shit is still ridiculous in my area. Everything else seems to have dropped back to in the ballpark of where it had been before all this craziness(most things still slightly higher but you know how that goes) plywood though? Still has a price tag that makes me wonder why the middle ply isnt made of gold.
Someone please tell Lowe’s that lumber prices have come down
I don t need as much lumber when I m building with ICFs.
Too late for many old lumberyards that have gone under…. It’s only going to benefit the bigs and they’ll buy out smalls, and control pricing from there.
I need housing in general to come down. Up over 40% since 2019
For the last 30 years my dad has drove me through home depot and Lowe's and I have a video graphic memory and noticed the prices of lumber…. 3-D printing will absolutely destroy lumber market…. Once legislation is passed
The construction and real estate sectors in whole are basically dead right now due to the recent massive inflation under the Biden regime. This is currently causing people to not spend any money besides food. Many people are loosing or about to loose there jobs and many companies are shutting their doors. The main stream media isn't covering this so many people think it's all just fine but when they learn the truth, all hell is going to break out.
Agreed , Im sick N tired of the warped, curved N bent after installed dried lumber has been doing lately !
Price to the home owner are not going down. You didn't mention Greed
Will the fires in canada affect price?
I stumbled across you video and, interestingly enough, had always wanted to get a better understanding of futures and commodities. You did a great job explaining this topic.
Excellent presentation: Clear, Concise & To the Point!
Thanks for the information.
Fact: The guys in the CME, and all the fat cats of the lumber business will not do anything that will lower their profits. These changes will increase their ability to manipulate lumber prices.
I live in the state where Lowes Home Improvement began. In fact the original store is about a hour away.
In fact there are four stores in less than a hour drive. And there biggest competitor H.D only has one in that range. And I've noticed that the Lowes store prices are 15 to 20% high er in their pricing!?!?!?
Look at what has changed over the last two-and-a-half years lumber prices have went sky-high and continue to do so stolen elections have severe deadly consequences, we have entered into the backside of the storm it's going to get crazy buckle up up
Since I'm old and really bad with math, I so appreciate all the information you supplied here!
Lumber is at THEFTCOM 5 price levels.
Thanks 🙏 Dave we appreciate your research 🔬 and work you Put in Brother.
The prices have changed and dropped a little bit since 2020 but man! The mill where I used to work burned down last year and it seemed to escalate prices a lot. We’ll see what happens but I’m still waiting for cheaper lumber to finish up my fence brother. God bless you Richly brother and God bless America 🇺🇸
The fact that you only use big box stores for your example is a big flaw in your assessment.
Is burning down forests part of Canadians plan to jack up prices?
Great information as always. Keep it coming, much appreciated!
Developer's and corporate contractors should pay more for wood than civilian residents that build for no profit but use , greed tax
Still all over priced, and the dollar is worth 4x less , so more expensive than ever