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LEONARD LUMBER REPORT: Last week, many “new-news” were created

Recap: Last week, many "new-news" were created. There were new lows in futures, new lows in cash, new highs in industry longs, and the list goes on. Market participants have turned their ire or blame toward Southern Yellow Pine. The data isn't in line with such a bearish market. The data lag has kept us all on a constant watch for the bounce. I'm beginning to wonder if that bounce is a unicorn. As we clean up July next week and traders get back to work, we should expect some corrections. The facts are most have reduced inventories. It has been ...

AG MARKET UPDATE: JUNE 14 – JULY 8

Corn had the bottom fall out of it after trading between $4.60 and $5 from March to June. The USDA last week pegged the US corn crop at 91.475 million acres, over 1 million acres higher than the trade estimate. The USDA did make a note that those were the reported acres at the time of the survey so there is a good chance not all those acres end up getting planted. The crop ratings are currently better than last year’s at this time that led to a record crop and with no major weather concerns on the horizon and ...

LEONARD LUMBER REPORT: The best word to describe last week’s trade was erosion

Recap: The best word to describe last week's trade was erosion: erosion in value, erosion in the housing sector, and finally, erosion in the economy. The industry waits for a truckload of sand to show up as the beach slips into the ocean. We searched for green shoots to pop up all week, only to see lower cash prices. One fact remains: it is the lumber market, and rallies are created out of nothing. Last week's trade indicates the market isn't ready. Let's look at a few factors which could already be in play or are forming. The key factor is the ...

LEONARD LUMBER REPORT: IS DEMAND SLOWING AT A PACE THAT HURTS THE MARKET?

Recap: The challenge coming into the year was curbing enough production to offset the slowdown in housing. The economics are simple. Demand slowed at a quicker pace than most would have expected. The question now becomes whether demand is slowing at a pace that hurts the market. Are we done? Since 2019, all I have heard was the amount of business showing up on traders' desks, even at the COVID lows. Every bearish run was only temporary. I have not heard those words all year. It looks like the old business has now run out of steam. Without China and Europe, our ...

AG MARKET UPDATE: MAY 31 – JUNE 14

Corn’s small 18 cent rally off recent lows for new crop corn has been very welcome after 6 down days in a 7-day period to end May and start June. This week’s USDA Report was a non-event with the USDA making no changes to South Americas production from last month despite the trade expecting production well below the USDA’s estimate of 175 mmt (171.82 estimated). CONAB released their estimates on Thursday, increasing their estimates for Brazil’s corn crop but still 310 million bushels below what the USDA is saying. The heat over the next couple of weeks is not expected ...