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LEONARD LUMBER REPORT: I have to start with the chart. It helps to clarify the argument that the mills’ added variable costs are of little relevance to the market

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  • LEONARD LUMBER REPORT: I have to start with the chart. It helps to clarify the argument that the mills’ added variable costs are of little relevance to the market
September 2, 2025 rcmagserv Agriculture, CME, Education, Futures, Hedging, Housing, Lumber, Market Commentary, Market Updates, Research, Risk Management, Weekly Prices 0 comment  Like

LEONARD LUMBER REPORT: I have to start with the chart. It helps to clarify the argument that the mills’ added variable costs are of little relevance to the market

The Lumber Market:

I have to start with the chart. It helps to clarify the argument that the mills’ added variable costs are of little relevance to the market. That said, it did cause waves. The market bottomed in July of 2024 after Biden dropped out. It rallied up until the tariffs were put on hold, fell, and then rebounded into the duties. The argument today states that the flat demand warrants the market to test the low again. After Friday’s disappointing trade, it could be possible. Outside influences have moved the market higher since July 2024. We could return to the mean, but that is unlikely. What is likely is a 61% retracement of the move back to $525. That is based on the Sept contract. The cash market has not found a foothold yet. A $20 break in futures is nothing. Market indicators:

We remain a very efficient supply and demand market. Outside variables, while catching some momentum, do not change dynamics. Today, we have a macro issue. Stocks are too high for the pending increase in unemployment. Regional decreases in building activity can’t be picked up. And the last issue, and maybe the most important, is that a home is not affordable today. We keep putting lipstick on a pig, but housing is not affordable.

Note:

I like to mention the retirement of an outstanding person once in a while. Today I want to offer my congratulations to Jack Stevenson. We go back to the Tim Stock days. He finished up with USLBM. Great character and great market knowledge! Enjoy!!

Daily Bulletin:
Southern Yellow Pine:
The Commitment of Traders:
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
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