LEONARD LUMBER REPORT: Housing data continues to grind along

Weekly Recap:

Key Takeaways:

On Friday, May futures expired a buck over July. That means that there is no downside gap to go after. Also, the spread traded +4. We haven’t seen that since Sept of 2023. A case is building for less bad…

Housing data continues to grind along—not hot, not falling apart. 2026 is pacing slightly ahead of last year, but the bigger story remains margin compression. Costs are sticky, financing isn’t getting easier, and the entire chain is operating lean. Demand is there, but conviction is thin. This isn’t a demand problem—it’s a willingness problem. Nobody is comfortable. Dealers are hand to mouth; builders are managing starts carefully, and big boxes are still questioning turns versus dollars. The “feel” of the market is cautious participation—everyone’s involved, just with one foot in. We only see a trade when values dip into perceived replacement. There bids show up quickly, confirming underlying need. The lack of follow-through higher speaks more to positioning than fundamentals. Right or wrong structure remains the story.

Bottom Line
This is a low-conviction, high-cost environment. The market isn’t breaking—it’s grinding. Choppy trade, quick reactions to value, and limited downside follow-through remain the base case. The futures trade is confirming. The question is if the May trade means anything or not.

Technical
The market is flat. Price action continues to compress after repeated lower highs, but the pace of the declines is slowing. That flattening suggests selling pressure is losing momentum. Key levels are tightening, and the market feels like it’s coiling rather than trending. A push through recent highs would likely draw in momentum buyers, while dips are still being met with value-driven support. The wedge trendlines now sit at 596.90 and 558.30.

The lumber market doesn’t grind and then spike. A grind is usually met with more grinding. Lumber needs news to generate interest. So right now, we are looking at a close over 597 to push futures up to the 602 point etc. Last week’s low in May was 574.

Lots of verbiage for “same shit, different day.”