LEONARD LUMBER REPORT: Headwinds?? You would think so
Recap: Headwinds?? You would think so, but I came in last week with the same thought only to see a stronger trade. It is really difficult to gauge the effects in the short run of all this. We are not cattle or corn; we produce homes. The psychology of that buyer has been fragile to say the least. This won't help in the short run. Longer run, it will probably par inventories in the field. The current circumstances does not change the industry's outlook. It is still the same. Flat construction, less supply, and the rallies caused by low inventories ...
AG MARKET UPDATE: JANUARY 12 – MARCH 3
Corn fundamentals remain quietly supportive. Domestic demand continues to provide a steady floor, with ethanol grind holding firm amid workable processing margins. Feed demand has also remained intact, supported by stable livestock numbers. Export business has been competitive but not aggressive, as global buyers weigh U.S. offers against South American supply. Overall, stocks are comfortable but not burdensome, keeping the downside limited while failing to create urgency on the upside. From a technical perspective, corn futures have respected both support and resistance levels throughout the month. The market continues to trade sideways, with carry in the futures structure signaling that ...
LEONARD LUMBER REPORT: NOW WHAT?
Recap: Now what? This industry has been in search of some positives for a while now. Just the fact that crude is up almost $5 tonight is enough to chase many fence sitters away. The middle east conflict will not be an ongoing factor, but for today we get another economic negative. We saw the industry getting longer and the funds getting shorter on the commitment of traders report. We don't know why the funds are selling lumber futures, but if it a basket trade, they may be more aggressive tomorrow. That is the Monday morning report. We are getting ...
Leonard Lumber Report: Is this a Reversal?
Recap: Reversal?? The futures market was off going into Friday's trade. It was more of the same until the announcement hit on tariffs. I'm not going to get into what is said or what it means for lumber. The real issue is that the price of this commodity and the duties make it impossible for the mills to make money. That is the reality of it. Friday went from making a new low in March to rallying sharply. That is a textbook reversal. Since there are no longer textbooks in use we have to take a wait and see position ...
LEONARD LUMBER REPORT: “Made it another week” is not a strategy; it is what we are forced to accept
Recap: "Made it another week" is not a strategy; it is what we are forced to accept. Today, the producer side is waiting for the squeeze to occur, while the buy side is looking for oversupply to weigh on prices. The market has a macro view of the trade, which is all in. It may just be a market sitting at equilibrium, slowly leading into a trend. Lumber is either volatile or flat. It tends not to trend, forcing the trade to "pick a side." Today, the time of year and weather have allowed buyers to hold off. The mills may ...
