#Lumber thoughts:
seems like we are going to break the all-time high.The industry largely accepts this. $2000/mbf is on everyone's mind.

Why? Some are caught short...again...BUT most folks did good job buying but have gotten absolutely hosed by rail logistics out of Canada 1/x
There are stacks of lumber piled up at the producer that are stuck there. 100% of sold, and likely sold at numbers below $1000. But rail cars can't get to the producers to get loaded. Maybe 8 weeks behind now? 2/x
So, spring jobs are starting to call for material. Local lumber yards have to scramble to buy whatever is available in spot markets to buy time to get their cheaper lumber delivered. 3/x
you couple that group of buyers who can't get wood delivers with the group of buyers who are completely naked (no prior lumber on order) and you got a lot of desperate buyers. END

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More from @LumberTrading

Aug 17, 2021
Shall we revisit my offer to buy lumber swaps at $1,300 for next two years? I think it’s time for a status update.
Read 15 tweets
Jun 18, 2021
Why hasn't my supplier shown me lower prices:

Suppliers average cost is still very high. They have to buy a lot of cheaper lumber to offset the costs of a lot of expensive lumber.

No one has bought a lot of cheap stuff yet to bring their avg cost down! Market still falling
in a weird way, you're quotes won't come down until the market bottoms. That happens when your supplier steps in to buy more, often making market bounce.

So, once the bottom is in and that lower price works its way into avg costs, THEN quotes get cheaper.
Maybe if suppliers got flooded with new business, they'd itch to buy and the bottom will get set sooner?
Read 5 tweets
May 20, 2021
Lumber thoughts:
Things I’m seeing now that are new to this rally:

1- demand side is finally pushing back. Capacity complaints more so than price complaints.

2- lumber yards willing to buy for deliveries 8 weeks out. Trying to get coverage for q3 at record higher prices.

3- May futures expiration was kinda....boring. If there was a scramble for prompt wood, May contract would have shot up that last week of trading. It didn’t.

4- My business of JIT truck delivery is slow and volatile. Not much panic.

5- Sawmill inventories trending up per data
6- Sawmills haven’t been able to increase prices for a week. Still have sold out into June, but not beyond...yet!
Read 5 tweets
Apr 12, 2021
To understand what is happening in the near term lumber market, here are a few scenarios:

Framing packages for home builders were agreed to 30-45 days ago. Lumber yards didn’t cover that commitment anticipating prices would dip soon. No dip, deadline approaching, gotta cover.
Home builders have delayed issuing POs to lumber yards thinking prices we dip. They delayed q4 projects to q1. No dip came, deadlines approaching, gotta start the project no matter what.

Same dynamic as before.
Lumber yards, having been burned so much the last 6 months, covered jobs more aggressively but demand outpaced projections and they are under bought. Scrambling to cover new business that wasn’t budgeted for.
Read 4 tweets

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