{"id":125836,"date":"2021-05-20T22:59:29","date_gmt":"2021-05-20T22:59:29","guid":{"rendered":"https:\/\/precoinnews.com\/?p=125836"},"modified":"2021-05-20T22:59:29","modified_gmt":"2021-05-20T22:59:29","slug":"lumber-executive-expects-volatility-elevated-prices-to-last-for-foreseeable-future","status":"publish","type":"post","link":"https:\/\/precoinnews.com\/business\/lumber-executive-expects-volatility-elevated-prices-to-last-for-foreseeable-future\/","title":{"rendered":"Lumber executive expects volatility, elevated prices to last for &#x27;foreseeable future&#x27;"},"content":{"rendered":"<ul>\n<li>&quot;Our belief is that this cycle that we&#x27;re currently in &#8230; is here for the foreseeable future,&quot; Sherwood Lumber&#x27;s Kyle Little told CNBC on Thursday.<\/li>\n<li>While lumber prices may not necessarily set another record high, &quot;the lows will tend to be much, much higher than they were in the past,&quot; Little said.<\/li>\n<\/ul>\n<p>A lumber industry veteran told CNBC on Thursday he expects the hot lumber market to persist, at least for a few more months, keeping both prices and volatility elevated.<\/p>\n<p>&quot;Our belief is that this cycle that we&#x27;re currently in &#8230; is here for the foreseeable future,&quot; said Kyle Little, chief operating officer at Sherwood Lumber, a privately held New York-based wholesale distributor. He&#x27;s also a former lumber trader.<\/p>\n<p>&quot;That doesn&#x27;t mean we&#x27;re not going to trade off those most recent highs,&quot; Little said in an interview on &quot;The Exchange,&quot; referring to May 10, when lumber hit a record of $1,711 per thousand board feet.<\/p>\n<p>&quot;But the lows will tend to be much, much higher than they were in the past because of the lack of supply and the high rate of demand that&#x27;s out in the marketplace,&quot; he said.<\/p>\n<p>Little said his view is informed by research his company conducted late last year, analyzing seven previous bullish cycles in lumber over the past 35 years. They&#x27;ve ranged from nine months to 41 months, he said, with the average falling between 18 and 24 months.<\/p>\n<p>He said the current boom is in roughly its 11th month, sparked partly by a pandemic-related surge in home construction that caught both homebuilders and lumber producers off guard.<\/p>\n<p>&quot;Volatility is all over the place, and we expect that to continue to be that way in lumber,&quot; Little said. <\/p>\n<p>The Chicago Mercantile Exchange has a maximum price range, known as limit up and limit down, that futures contracts for various commodities are allowed to trade within for each session.<\/p>\n<p>Lumber futures\u00a0for July delivery rose 4.75% on Thursday, hitting limit up in the session at $1,390\u00a0per thousand board feet.<\/p>\n<p>The action Thursday follows a wild session a day earlier, in which lumber futures hit limit down, then went on to hit limit up later in the day. <\/p>\n<p>There have been questions about when soaring lumber prices, which add to construction costs, would begin to cause a cooling in demand. Recent data showed that in April single-family housing starts declined over 13% compared with the prior month, and the cost of lumber and other commodities was seen as one factor in the slowdown.<\/p>\n<p>For Sherwood Lumber, Little said, &quot;one of the key metrics that we look at specifically in measuring short-term demand and pace of sales is looking at our current shipments relative to our actual sales pace.&quot;<\/p>\n<p>In the past six months, as the lumber market heated up, sales compared with shipping rate accelerated to more than &quot;double and triple the amount,&quot; he said. But that&#x27;s changed recently.<\/p>\n<p>&quot;We&#x27;ve seen a decrease from the peak that we saw at the end of April of about 27% over the last two weeks,&quot; he said. &quot;It looks like we&#x27;ll see a similar kind of reduction this week, as well.&quot;<\/p>\n<p>Source: <a href=\"https:\/\/www.cnbc.com\/2021\/05\/20\/elevated-lumber-prices-to-last-for-foreseeable-future-says-executive.html\" target=\"_blank\" rel=\"noopener\">Read Full Article<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"<p>&quot;Our belief is that this cycle that<\/p>\n","protected":false},"author":3,"featured_media":125835,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[23051],"tags":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v21.7 - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>Lumber executive expects volatility, elevated prices to last for &#x27;foreseeable future&#x27; 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