{"id":300876,"date":"2021-07-16T18:33:00","date_gmt":"2021-07-16T15:33:00","guid":{"rendered":"https:\/\/en.buradabiliyorum.com\/commodities-corner-why-now-might-be-the-best-time-to-buy-lumber\/"},"modified":"2021-07-16T18:33:00","modified_gmt":"2021-07-16T15:33:00","slug":"commodities-corner-why-now-might-be-the-best-time-to-buy-lumber","status":"publish","type":"post","link":"https:\/\/buradabiliyorum.com\/en\/commodities-corner-why-now-might-be-the-best-time-to-buy-lumber\/","title":{"rendered":"#Commodities Corner: Why now might be the best time to buy lumber"},"content":{"rendered":"<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_85 counter-hierarchy ez-toc-counter ez-toc-custom ez-toc-container-direction\">\n<p class=\"ez-toc-title\" style=\"cursor:inherit\">Table of Contents<\/p>\n<label for=\"ez-toc-cssicon-toggle-item-6a36e1ae5c7d9\" class=\"ez-toc-cssicon-toggle-label\"><span class=\"\"><span class=\"eztoc-hide\" style=\"display:none;\">Toggle<\/span><span class=\"ez-toc-icon-toggle-span\"><svg style=\"fill: #dd3333;color:#dd3333\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"list-377408\" width=\"20px\" height=\"20px\" viewBox=\"0 0 24 24\" fill=\"none\"><path d=\"M6 6H4v2h2V6zm14 0H8v2h12V6zM4 11h2v2H4v-2zm16 0H8v2h12v-2zM4 16h2v2H4v-2zm16 0H8v2h12v-2z\" fill=\"currentColor\"><\/path><\/svg><svg style=\"fill: #dd3333;color:#dd3333\" class=\"arrow-unsorted-368013\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"10px\" height=\"10px\" viewBox=\"0 0 24 24\" version=\"1.2\" baseProfile=\"tiny\"><path d=\"M18.2 9.3l-6.2-6.3-6.2 6.3c-.2.2-.3.4-.3.7s.1.5.3.7c.2.2.4.3.7.3h11c.3 0 .5-.1.7-.3.2-.2.3-.5.3-.7s-.1-.5-.3-.7zM5.8 14.7l6.2 6.3 6.2-6.3c.2-.2.3-.5.3-.7s-.1-.5-.3-.7c-.2-.2-.4-.3-.7-.3h-11c-.3 0-.5.1-.7.3-.2.2-.3.5-.3.7s.1.5.3.7z\"\/><\/svg><\/span><\/span><\/label><input type=\"checkbox\"  id=\"ez-toc-cssicon-toggle-item-6a36e1ae5c7d9\" checked aria-label=\"Toggle\" \/><nav><ul class='ez-toc-list ez-toc-list-level-1 ' ><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/buradabiliyorum.com\/en\/commodities-corner-why-now-might-be-the-best-time-to-buy-lumber\/#Lumber_futures_have_fallen_to_their_lowest_levels_of_the_year\" >Lumber futures have fallen to their lowest levels of the year<\/a><ul class='ez-toc-list-level-4' ><li class='ez-toc-heading-level-4'><ul class='ez-toc-list-level-4' ><li class='ez-toc-heading-level-4'><a class=\"ez-toc-link ez-toc-heading-2\" href=\"https:\/\/buradabiliyorum.com\/en\/commodities-corner-why-now-might-be-the-best-time-to-buy-lumber\/#Myra_P_Saefong\" >Myra P. Saefong<\/a><\/li><\/ul><\/li><\/ul><\/li><\/ul><\/nav><\/div>\n<p>&#8220;<strong>#Commodities Corner: Why now might be the best time to buy lumber<\/strong>&#8221;<\/p>\n<h2 class=\"article__subhead\" itemprop=\"alternativeHeadline\"><span class=\"ez-toc-section\" id=\"Lumber_futures_have_fallen_to_their_lowest_levels_of_the_year\"><\/span>\n  Lumber futures have fallen to their lowest levels of the year<br \/>\n<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p><\/p>\n<div class=\"column column--full article__content\">\n<div class=\"article__side\">\n<div class=\"container--sticky not-active\">\n<div id=\"cx-next\" data-nosnippet>\n              <\/div>\n<\/p><\/div>\n<\/p><\/div>\n<div id=\"js-article__body\" class=\"article__body article-wrap at16-col16 barrons-article-wrap\" itemprop=\"articleBody\" data-sbid=\"WP-MKTW-0000339921\">\n<div class=\"barrons-article-ad-wrapper\">\n<div data-track=\"barrons-article-ad-wrap\" class=\"barrons-article-ad sticky_item\">\n<div class=\"barrons-main-article-ad-target sticky_target body_ad\" aria-hidden=\"true\"><\/div>\n<\/p><\/div>\n<\/p><\/div>\n<div data-layout=\"\n                inline\" data-layout-mobile=\"\" class=\"\n          media-object\n          type-InsetArticleReader\n              \n              inline\n  article__inset\n          article__inset--type-InsetArticleReader\n              article__inset--inline\n  \"><\/p>\n<div class=\"media-object-article-reader\">\n<div class=\"audioplayer\" data-sbid=\"WP-MKTW-0000339921\" role=\"region\" aria-label=\"Listen to Article\" tabindex=\"-1\" id=\"articlereader\" data-show-title=\"false\" data-theme=\"wsj-article-reader\" data-show-header=\"false\" data-show-subscribe=\"false\" data-ads-enabled=\"true\" data-save-publication=\"false\">\n        <\/div>\n<\/p><\/div>\n<\/p><\/div>\n<p>       After more than doubling in price last year, lumber futures have dropped to their lowest level of 2021, on track to suffer a third-straight monthly decline\u2014potentially offering a \u201csmall window\u201d for buyers to benefit from cheaper prices.<\/p>\n<p> This is \u201cprobably the best time for homeowners and builders to make their lumber purchases,\u201d said Todd London, senior vice president of sales for Sherwood Lumber. \u201cThis small window in time has a high probability of representing the absolute best time to buy for a year that has been riddled with supply chain disruptions, uncertainty and volatility.\u201d<\/p>\n<div class=\"paywall\">\n       \u201cRemaining on the fence as to whether or not to start your coming project may likely result in missing the best opportunity to buy lumber in all of 2021,\u201d he said.<\/p>\n<div data-layout=\"inline\n                \" data-layout-mobile=\"\" class=\"\n          media-object\n          type-InsetPullQuote\n            inline\n    scope-web|mobileapps\n  article__inset\n          article__inset--type-InsetPullQuote\n            article__inset--inline\n  \"><\/p>\n<div class=\"wsj-article-pullquote article__inset__pullquote \">\n<p class=\"pullquote-content article__inset__pullquote__quote\">\n        <span class=\"l-qt article__inset__pullquote__mark--left\">\u201c<\/span><br \/>\n        \u201cRemaining on the fence as to whether or not to start your coming project may likely result in missing the best opportunity to buy lumber in all of 2021.\u201d<br \/>\n        <span class=\"r-qt article__inset__pullquote__mark--right\">\u201d<\/span><\/p>\n<p>        <small><br \/>\n          <span class=\"inset-author article__inset__pullquote__author\">\u2014 Todd London, Sherwood Lumber<\/span><br \/>\n        <\/small><\/p><\/div>\n<\/p><\/div>\n<p>       On Thursday, lumber futures<br \/>\n        LBU21,<br \/>\n        <bg-quote field=\"percentchange\" format=\"0,000.00%\" channel=\"\/zigman2\/quotes\/219522398\/delayed\" class=\"negative\">-4.96%<\/bg-quote><\/p>\n<p>        LB00,<br \/>\n        <bg-quote field=\"percentchange\" format=\"0,000.00%\" channel=\"\/zigman2\/quotes\/210109673\/delayed\" class=\"negative\">-4.96%<\/bg-quote><br \/>\n       settled at $574.90 per 1,000 board feet\u2014\u00a0their lowest so far this year\u2014and they trade more than 30% lower year to date, according to Dow Jones Market Data. The move down in lumber prices follows a 115% price rally in 2020.<\/p>\n<p> Michael Gayed, portfolio manager of the\u00a0ATAC US Rotation\u00a0exchange-traded fund<br \/>\n        RORO,<br \/>\n        <bg-quote field=\"percentchange\" format=\"0,000.00%\" channel=\"\/zigman2\/quotes\/222618335\/composite\" class=\"negative\">-0.43%<\/bg-quote><span>,<\/span><br \/>\n       which uses lumber and gold prices to help gauge volatility in equities, believes prices may still be headed for more declines, however.<\/p>\n<p>The \u201cvertical\u201d\u00a0move in lumber prices\u00a0that ended in May of this year was \u201cnot justified fundamentally,\u201d he said. \u201cThe surge made no sense because it\u2019s not like housing and construction suddenly went ballistic in a matter of eight weeks.\u201d<\/p>\n<p>The decline in prices the market has seen more recently may be a sort of \u201cundoing\u201d of that unjustified advance, and a \u201cfunction of mean reversion\u201d taking place in the commodity, said Gayed, pointing out that mean reversion centers around the idea that asset prices historically revert to their long-term average.<\/p>\n<p>For mean reversion to occur, lumber would have to revert to its historical average and likely go below it, he said, so prices may drop another 20% to 30%, given lumber\u2019s typical historic price range.<\/p>\n<p>The market has seen an increase in production more recently. North America added 1.4 billion board feet of sawmill capacity in the past 12 months, with another 1.6 billion board feet of capacity coming online in the second half of 2021,\u00a0<a rel=\"nofollow noopener\" target=\"_blank\" href=\"https:\/\/forisk.com\/blog\/2021\/06\/15\/north-american-pulp-mill-capacity\/\" class=\"icon none\">according to a report<\/a>\u00a0from Forisk Consulting published in June.<\/p>\n<p>Over the past few months, there\u2019s been an increased amount of lumber capacity coming online and sawmill workers returning to work, which has \u201csubstantially boosted supply,\u201d said Joe Sanderson, managing director and chief executive officer of natural resources at Domain Timber Advisors.<\/p>\n<div id=\"cx-membership-tile\"><\/div>\n<p>Still, Sanderson expects lumber prices to return to \u201cmore normal levels and becoming in line with\u00a0housing starts data,\u201d with $550 to $650 a \u201cmarket equilibrium price\u201d given current building permit data. That assumes no major supply chain disturbances from further Covid-related challenges or natural disasters, such as catastrophic hurricanes or wildfires, he said.<\/p>\n<p>Meanwhile, drought conditions are likely to \u201cadversely impact lumber,\u201d said Sanderson. Dry conditions have increased the fire danger in many areas of the West Coast and with \u201ccasualty loss and harvest restrictions, we expect a slowdown in timber production and subsequent increase in lumber prices.\u201d<\/p>\n<p>Looking ahead, Sherwood Lumber\u2019s London said it\u2019s possible, but also unlikely that lumber prices will reach a fresh record this year. Lumber futures saw a record high settlement at $1,670.50 on May 7.<\/p>\n<p>Even so, London expects to see a \u201crise in lumber prices again very soon, with a gradual slow down during the winter months when construction slows more in many regions of the country.\u201d For 2022, he expects volatility to be the <a href=\"https:\/\/buradabiliyorum.com\/en\/category\/download-scripts-themes-apps\/\" data-internallinksmanager029f6b8e52c=\"9\" title=\"Download Scripts &amp; Themes &amp; Apps\" target=\"_blank\" rel=\"noopener\">theme<\/a> for lumber.<\/p><\/div>\n<\/div><\/div>\n<p><\/p>\n<div class=\"byline article__byline\">\n<p>      <span>By<\/span><\/p>\n<div class=\"author  hasMenu\" data-scrim='{\"type\":\"author\",\"header\":\"Myra P. Saefong\",\"subhead\":\"The Wall Street Journal\",\"list\":[]}' itemscope itemprop=\"author\" itemtype=\"http:\/\/schema.org\/Person\">\n<h4 itemprop=\"name\"><span class=\"ez-toc-section\" id=\"Myra_P_Saefong\"><\/span>Myra P. Saefong<span class=\"ez-toc-section-end\"><\/span><\/h4>\n<\/p><\/div>\n<\/div>\n<blockquote><p><strong><span style=\"color: #ff6600;\">If you liked the article, do not forget to share it with your friends. Follow us on\u00a0<span style=\"color: #ff0000;\"><a style=\"color: #ff0000;\" href=\"https:\/\/news.google.com\/publications\/CAAqBwgKMLG0nwswvr63Aw\" target=\"_blank\" rel=\"nofollow noopener noreferrer\">Google News<\/a><\/span>\u00a0too, click on the star and choose us from your favorites.<\/span><\/strong><\/p><\/blockquote>\n<blockquote>\n<p style=\"text-align: center;\">For forums sites go to <span style=\"color: #ff9900;\"><a style=\"color: #ff9900;\" href=\"https:\/\/forum.buradabiliyorum.com\/\" target=\"_blank\" rel=\"noopener\">Forum.BuradaBiliyorum.Com<\/a><\/span><\/strong><\/p>\n<\/blockquote>\n<blockquote>\n<p style=\"text-align: center;\"><strong>If you want to read more <a href=\"https:\/\/buradabiliyorum.com\/en\/category\/news\/\" data-internallinksmanager029f6b8e52c=\"2\" title=\"News\" target=\"_blank\" rel=\"noopener\">News<\/a> articles, you can visit our <span style=\"color: #ff9900;\"><a style=\"color: #ff9900;\" href=\"https:\/\/en.buradabiliyorum.com\/news\/\" target=\"_blank\" rel=\"noopener\">News category.<\/a><\/span><\/strong><\/p>\n<\/blockquote>\n<p><span style=\"color: black;\"><a style=\"color: #ff9900;\" href=\"http:\/\/www.marketwatch.com\/news\/story.asp?guid=%7B20C05575-04D4-B545-752F-D18CB1131091%7D&#038;siteid=rss&#038;rss=1\" target=\"_blank\" rel=\"noopener\">Source<\/a><\/span><\/p>\n","protected":false},"excerpt":{"rendered":"<p>&#8220;#Commodities Corner: Why now might be the best time to buy lumber&#8221; Lumber futures have fallen to their lowest levels of the year After more than doubling in price last year, lumber futures have dropped to their lowest level of 2021, on track to suffer a third-straight monthly decline\u2014potentially offering a \u201csmall window\u201d for buyers&#8230;<\/p>\n","protected":false},"author":1,"featured_media":300877,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"fifu_image_url":"","fifu_image_alt":"","footnotes":""},"categories":[70897],"tags":[],"class_list":["post-300876","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-news"],"_links":{"self":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/posts\/300876","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/comments?post=300876"}],"version-history":[{"count":0,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/posts\/300876\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/media\/300877"}],"wp:attachment":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/media?parent=300876"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/categories?post=300876"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/tags?post=300876"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}