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Trading lumber ??


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Trading lumber ??

  #1 (permalink)
lumberjack
Vancouver, Canada
 
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Hi all, I was wondering if there's anyone who trade lumber ?
I'd like to know some general idea on what the market is like and you guys' thoughts on it.

Thanks all.

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  #2 (permalink)
lightsun47
Toronto, Canada
 
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On a side note, your name suggests YOU ARE READY to trade lumber futures like a pro!

Sent using the NexusFi mobile app

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  #3 (permalink)
 
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 SMCJB 
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Not much but its a start


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  #4 (permalink)
 myrrdin 
Linz Austria
 
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I traded lumber some years ago, following seasonal patterns. With a sound money management it worked quite well.

But it seems to me that nowadays the chart does not follow the seasonals as well as it did years ago.

The market is very thin, and it is dominated by a few traders. Large unforeseeable (for me) moves were more the rule than the exception. Fills can be (and often are) terrible.

Additionally, the volume of options is extremely thin, thus, in my opinion, it does not make sense to touch them.

I do not trade lumber for on a regular basis for some years, and do not intend to start again.

To trade lumber successfully, it is necessary in my opinion to understand in detail how the small group of large lumber traders is working.

Best regards, Myrrdin

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  #5 (permalink)
 myrrdin 
Linz Austria
 
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It is interesting to note that the recent strong move of the lumber price happened without a severe change of the COT data, which are more or less neutral for several months. Open interest is extremely low.

Does anyone have an explanation ?

Best regards, Myrrdin

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 SMCJB 
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Bloomberg: Lumber Prices Soar, But Logs Are Still Dirt Cheap
https://www.bloomberg.com/news/articles/2021-04-20/lumber-s-version-of-a-crack-spread-is-exploding-from-cheap-trees

Lumber prices have soared to records. Demand for wood is skyrocketing. The shares of wood suppliers are surging.

And yet, trees themselves are dirt cheap in places like Louisiana, where timber supplies are plentiful.

The so-called stumpage fee, or what lumber companies pay to land owners for trees, for Louisiana pine sawtimber on March 31 was $22.75 per short ton, according to the latest data from price provider TimberMart-South. Thatís the lowest since 2011.

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  #7 (permalink)
 myrrdin 
Linz Austria
 
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One of the rare publications on lumber futures:

https://www.mcoscillator.com/learning_center/weekly_chart/lumber_blowoff_and_falling_open_interest/

Best regards, Myrrdin

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  #8 (permalink)
 
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 SMCJB 
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From https://numlock.substack.com/p/numlock-news-february-24-2022-gran
Lumber
Lumber is an incredibly hot commodity right now, but the volatility means as a result itís become hard to actually trade lumber. Right now if the price of lumber on the commodity exchange moves too much one way or another, it triggers a shutdown of the market, an event that has happened in 25 of this yearís 35 trading sessions. The shutdown is designed to prevent a disorderly market, but itís actually created a pretty nonfunctional one. In order to keep the wood flowing, the Chicago Mercantile Exchange will increase the daily trading band by another 90 percent, meaning that starting on March 7 the maximum amount the price of a thousand board feet can move in either direction in a given day is capped at $57. For perspective, before the pandemic a thousand board feet went for $350.
which is based upon the WSJ story...

https://www.wsj.com/articles/lumber-trading-futures-wood-11645631506?mod=e2tw

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  #9 (permalink)
 shzhning 
Madison, NJ
 
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CME is introducing a new lumber contract - think it as a new micro for those wanted to test the water

FROM WSJ:
https://www.wsj.com/articles/lumber-futures-are-getting-a-makeover-11657540801?mod=Searchresults_pos1&page=1

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Last Updated on July 12, 2022


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