LEONARD LUMBER REPORT: A futures reversal summed up last week’s trade
Recap:
A futures reversal summed up last week’s trade. We came into the week on a positive note, with trade becoming more fluid. Monday’s fat-finger debacle ended that quickly, and it took the rest of the week just to claw back half of the move.
The cash market told a different story from futures. Trade was solid throughout the week, with strength across most species; only spruce lagged. SYP continues to move higher in sizable increments, and I would expect Spruce to begin catching some of that enthusiasm. While higher rates and crude prices remain headwinds, the market’s attention today is squarely on supply and demand. Improving weather conditions should also help bring a few buyers back into the market.
Technical:
Monday’s selloff did some damage, pulling the market back into the March expiration area. As a result, May’s technical structure has reverted to early‑March levels, effectively nullifying the upcycle that had been forming. From here, the levels are well defined. A close back above the old high of 614.50 would restore upward momentum and put the market back on a positive trajectory. Conversely, a close below 582.00 would signal a technical reversal and shift the near‑term bias lower.
Daily Bulletin:
https://www.cmegroup.com/daily_bulletin/current/Section23_Lumber_Options.pdf
Southern Yellow Pine:
https://www.cmegroup.com/markets/agriculture/lumber-and-softs/southern-yellow-pine.volume.html
The Commitment of Traders:
https://www.cftc.gov/dea/futures/other_lf.htm
About the Leonard Report:
The Leonard Lumber Report is a column that focuses on the lumber futures market’s highs and lows and everything else in between. Our very own, Brian Leonard, risk analyst, will provide weekly commentary on the industry’s wood product sectors.
Brian Leonard
bleonard@rcmam.com
312-761-263