{"id":84673,"date":"2023-03-28T08:02:31","date_gmt":"2023-03-28T08:02:31","guid":{"rendered":"https:\/\/tin.happy-projects.ro\/us-lumber-prices-do-not-react-to-the-latest-crisis\/"},"modified":"2025-09-19T08:59:46","modified_gmt":"2025-09-19T08:59:46","slug":"us-lumber-prices-do-not-react-to-the-latest-crisis","status":"publish","type":"post","link":"https:\/\/www.timberindustrynews.com\/ro\/us-lumber-prices-do-not-react-to-the-latest-crisis\/","title":{"rendered":"US lumber prices do not react to the latest crisis"},"content":{"rendered":"

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On February 27, 2023, nearby May random-length lumber futures prices were at the $406 level, with the new physical contract for May delivery at around $530 per 1,000 board feet.<\/p>\n

The new physical contract for May delivery\u00a0at $537.50 was slightly higher on March 21, 2023, than the late February level.<\/p>\n

The recent issues in the banking sector have impacted many markets, but lumber has not declined. \u00a0The ECB raised interest rates by 50 basis points last week, and all signs point to another at least 25 basis point hike by the U.S. Federal Reserve at this week\u2019s meeting. On February 27, nearby\u00a0April NYMEX crude oil\u00a0and\u00a0May COMEX copper futures\u00a0settled at $75.68 per barrel and $4.0110 per pound, respectively. While lumber prices increased, crude oil was 9.2% lower at $68.70, and copper edged lower to $3.9895 on March 21.<\/p>\n

Lumber tends to move first and lead- Liquidity is the likely reason<\/strong><\/p>\n

Lumber is a highly illiquid futures market. The total number of open long and short positions in the soon-to-disappear random-length lumber futures market was 1,499 contracts as of March 20, with daily volume below the 500-contract level. Open interest in the May physical contract was lower at 1,039 contracts, with daily volume below 120 contracts.<\/p>\n

The low volume and open interest compared to crude oil, copper, and other futures markets lead to excessive price variance as bids to buy disappear when the price declines and offers to sell evaporate during rallies.<\/p>\n

Over the past years, lumber has often signaled the path of least resistance for other commodity futures markets because of the low liquidity that leads to sudden changes in its price path. Lumber is untradeable, but has been a barometer for other industrial raw material markets. Lumber\u2019s recent strength in the face of bank failures and tight credit markets could be an omen for copper, crude oil, and other commodity prices.<\/p>\n

The long-term chart\u00a0shows four peaks in the lumber futures market:<\/p>\n