Industry News Markets
Softwood lumber prices up from last month; down compared to last year: March 2019

After a sleepy end to 2018, the manufacture, sale, and consumption of North American dimension softwood lumber in 2019 to date has bobbled to relative normalcy. In the type of data that analysts like Madison’s loves, the wholesaler (producer or secondary supplier) price of benchmark framing softwood lumber commodity Western Spruce-Pine-Fir KD 2×4 #2&Btr last week is up +22% from one-month-ago, but down -21% from the same time last year. Given the seeming moderation of other benchmark construction framing lumber items as well (please see graph of price history below), the price levels last week might be setting a new floor. Depending on where print is this Friday, it’s possible operators are beginning to know what their sales prices will be over this next U.S. home building season.

Like the previous week, wholesaler prices for benchmark lumber (net FOB sawmill) commodity Western Spruce-Pine-Fir KD 2×4 #2&Btr remained flat at U.S.$422 mfbm, an $0 or +0% increase from $422 the week before. However Inland Hem-Fir and Southern Yellow Pine prices bounced upward by notable margins, making understanding of current market conditions a little bit more murky.

Wholesaler construction framing softwood trading activity remained muted. Pockets of cold weather continued to impede rail services. — Madison’s Lumber Reporter

Once again, wholesaler sales prices for benchmark lumber (net FOB sawmill) commodity Western Spruce-Pine-Fir KD 2×4 #2&Btr remained flat at U.S.$422 mfbm, an $0 or +0% increase from $422 the week before. Southern Yellow Pine prices surged forward yet more, after crashing hard (too hard?) for the end of 2018. Such volatility, which appears across the range of standard construction framing lumber products, is expected after the spectacular rise and immediate plummet in the middle of last year (please see graphs this page).

Madison’s continues to wait for an update from the Chicago Mercantile Exchange regarding lumber futures trading on the CME.

Trading activity, meanwhile, on the softwood lumber futures remains bananas to incomprehensible. Volumes, as since this unsavoury activity started, are negligible.=

This week’s price for the other large volume-traded softwood lumber commodity, Southern Yellow Pine, improved gains made the previous week to jump another +$13, or +3%, to U.S.$434 mfbm, from $421 the week before. One-year-ago, that price was $171, or 28%, higher than it is now; at U.S.$605 mfbm in the beginning of March 2018.

Curtailed production volumes and log supply issues ensured sawmills didn’t have to put too much downward pressure on prices however. Order files of one to three weeks were the norm. — Madison’s Lumber Reporter

Current softwood lumber prices compared to recent and historical highs: March 2019

The below table is a comparison of June 2018 and March 2019 benchmark dimension softwood lumber 2×4 prices compared to historical highs of 2004/05: