Leonard Lumber Report: The Futures Market Is Under Pressure
The futures market was under pressure all week as a seasonal pause had hit the market; however, the push to buy cash has eased. The transportation issue hasn't eased, but the buying has. That has led to more wood in the secondary's hand, thus more wood available in the field. That amount isn't much, and it is high priced. The takeaway from last week is only when the push eases, so does cash flow to the middle of the market. Any time a buyer sees two offers available, they close the POs, which is what we are seeing again. This ...
AG MARKET UPDATE: MARCH 3 – 10
Corn made slight gains on the week with very volatile intraday markets. The Ukraine and Russian news continue to stay in the market and will likely dominate headlines until it ends. Other news worldwide is that South America got rains in southern Brazil and Argentina, with dry central and northern Brazil. Russian officials announced that they would suspend fertilizer exports through the end of the year, presenting a supply crunch across the world. This week’s USDA report was nonexistent in the markets as there were no surprises. As mentioned last week, Ukraine’s corn crop may not get in the ground ...
The Leonard Lumber Report: The Commodity Index’s Hit Decades Highs
Last week the commodity funds saw a massive influx of capital as the investment community tried to take advantage of a booming commodity cycle. The commodity index's hit decades highs. How will this affect lumber futures? I'll try to navigate all the features of the industry today. I'm pretty sure you can take the word lumber out and insert a different commodity because the issues look the same. Keep that in mind. Factors pressuring the lumber market: First is transportation, especially rail. Not only does it cause the jobsite supply to be late, but it is also complicating the whole ...
AG MARKET UPDATE: FEBRUARY 24 – MARCH 3
Corn made large gains this week following wheat, but not with the same panic. While Ukraine is a major corn exporter, it is not on the same level of wheat. Corn’s moves will be similar to wheat as the news from eastern Europe, and war will be problematic for the world balance sheets. While it has not moved with the same vigor as wheat, the $1 gain in the last eight trading days shows the potential fallout from this spooks the market. It is hard to tell how many acres will be lost this spring, but it is estimated that ...
The Leonard Lumber Report: The Difficulty of Managing Inventories in Today’s Marketplace
This week's back and forth trading in futures highlighted just how difficult it is to manage inventories in today's marketplace. The problem is insufficient real-time data to read supply or demand accurately. We saw the industry going from a too much wood attitude on Monday to a now enough by Friday. That type of uncertainty has plagued this industry for years. In the recent past, many took to contracts, which has taken out some of the emotion but has also reduced margins. This buy sides self-prescribed shrinking of margins causes voids in the market. The reluctance of other buyers and ...
