LEONARD LUMBER REPORT: Lumber futures are choppy and directionless

Recap:

Lumber futures are choppy and directionless, basically mirroring a housing market stuck in neutral. From the builders to distribution, the game plan is to contain losses.

• Trade has been dominated by the roll, not fresh conviction buying or selling. Futures made new contract lows and bounced—a pattern we’ve seen repeatedly for nearly two years, with rallies failing quickly and momentum nowhere to be found. Just ask the longs who make pennies and give back dollars.

• The macro housing backdrop is decisively neutral. Existing‑home sales are weak, first‑time buyers are sidelined, inventory is improving only marginally, and mortgage rates remain a headwind—not a catalyst. Nothing here supports sustained upside, but nothing forces a full reset either.

• Technically, May futures have found support near $570, helped this time by available EFPs, which are pulling buyers back into futures on a hand‑to‑mouth basis. The weekly wedge keeps tightening, suggesting a breakout window approaching into May expiration, though timing remains tricky without a catalyst.

• Finally, the volatility of the futures trade has to be on all trader’s radar. It offers great opportunities, but also large loss potentials. Enjoy…..

Bottom line:
Futures are doing exactly what a neutral market does—failing rallies, finding buyers on weakness, and chopping traders to death. Until affordability actually improves or demand breaks meaningfully, this remains a range of trade driven more by structure and discounts than by confidence. Add to it that the industry likes the long side, and the funds continue to sell confirm more of the same.