LEONARD LUMBER REPORT: Last week’s trade was in line with expectations

LEONARD LUMBER REPORT: Last week’s trade was in line with expectations


Last week’s trade was in line with expectations. The computer pushed the market to new lows. Coming into this week, I would expect the computer to put pressure on the longs to blow them out. It doesn’t take a computer to know that the spec longs are in much higher and now getting margin calls. If you put a fundamental face on the market, the lack of any interest out there allows this sell-off. The fact that we buy the deals today adds pressure in a slowing market.

Yes, the housing market is slowing. The data is confusing, but the economy is acting as a weight around this industry. We need to keep employment at this level to keep the buyers around. A jump in the unemployment rate will cause us to lose the market, which keeps us most guarded.

There are two takeaways. The first is how much SYP weighs on the market when things are slow. The other is the stats on how well the basis traders have done. The market has a downward bias.


It wasn’t too long-ago that the RSI was at 6%. Today, at 23%, it seems high. The futures market is building a case for less business this year. Most are already trading that way. At some point the lack of inventory will bring in the buying and we will be off again.

A bit of advice to the producers. Sell all you can when the futures price starts with a 6.

Daily Bulletin:


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

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