Tuesday, January 8, 2013

Lumber Leads Commodities Market in 2012

I came across this article on Bloomberg.com and thought I would share it with my readers.  It will be interesting to see how this plays out for the timber markets and stumpage prices in Pennsylvania for 2013.  The Penn State Timber Market Report  has published the 3rd quater 2012 data.  Unfortunately, the 10 year trend is still downwards.  In fact, it is down nearly 7% for black cherry in the northwestern part of the state.  The article notes they are seeing an increase in building permits.  Here is a quote from the article that is quite promising, "The U.S. housing market rebounded this year, lumber prices soared 44 percent, the biggest annual gain since 1993."  With an increase in the housing market we may see a jump in our timber prices.  I wonder what the 4th quarter Timber Market Report will show?

Lumber May Fall 25% After Leading Commodities in 2012 (Bloomberg com)
Lumber futures may tumble as much as 25 percent from a seven-year high as output increases in Canada, the world’s biggest exporter, according to Forest Economic Advisors LLC.

The price may touch $300 per 1,000 board feet in 2013, Paul F. Jannke, a principal at the Westford, Massachusetts-based consulting company, said in a telephone interview on Dec. 27. In mid-October, he correctly forecast the rally. Futures on the Chicago Mercantile Exchange on Dec. 26 reached $399.50, the highest since April 2005.

“We’re pretty close to the peak,” Jannke said. “The initial spike tends to be the highest, then production ramps up. If the mills increase shifts from a 40-hour week to a 50-hour week, that’s a big jump, and everybody is ratcheting up their work weeks.”

To read the full article click here.

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