Tag: lumber report

Now What?

It was a very quiet pre-holiday week, with most of the attention focused on getting out rather than getting in. Who was doing the exiting remains unclear because the COT data is delayed by the Beeks transition. We should get a clearer picture tomorrow.

Price action was uneventful. Most sessions traded sideways on light volume, with Thursday’s modest rally providing the week’s only real spark.

The 620 area continues to act as solid support in both contracts, and the fundamentals appear to support that floor. Ironically, the caution in the market is helping keep takeaway better than expected. We’ve talked all year about the chronically underbought cash market, much of it by design, and that remains true today. If you’re slow, it’s largely because you’ve chosen to stay out of the market.

What we’re seeing now is a trade that wants to get long again—but only at its price. The combination of healthy takeaway and buyer reluctance is giving mills some much-needed confidence to defend levels. If buyers are willing to step up and pay more, it will get done. Until then, expect the standoff to continue.

The longer-term chart continues to support the story. March futures have maintained a strong support line off the April lows, and the technical picture generally confirms the fundamental outlook. It all comes back to the ABC pattern. If that interpretation is correct, the market should gradually work higher from here.

At the same time, let’s not get too far ahead of ourselves. Lumber remains a commodity that can be produced. You may not be able to find studs, but there are plenty of deals on 9-footers. The market has struggled on this one to get every product tight at the same time, and futures are only as strong as the weakest item in the cash market.

That said, today’s market knows there are buyers sweating bullets.

Technical

The technical outlook calls for more of the same, with the possibility of a push back toward the recent highs. With much of the industry sitting flat, the path of least resistance appears to be continued sideways trade with a modest upward bias.

Bottom Line: Buyers remain cautious, mills are gaining confidence, cash is staying firm, and the charts continue to lean constructive. Until something changes materially, expect more of the same—with an edge toward higher prices rather than lower ones. This is not a “punt.” This market does not have a defined trend again. 

Daily Bulletin:

Summary:

After five weeks of chop, futures finally broke out. The $20 move was a welcome sight and pulled cash along with it. Mills did their part keeping a lid on things—trying to build files rather than chase. Classic lumber pop. No one’s shocked that it is happening.

The question is what comes next.

Normally, this is where a market starts to build a run. But recent history says these moves have been one-and-done. So, at 608, I’m not ready to assume we’re headed for 618, then 628. This market still has to prove itself—and that likely means specs stepping in and buying strength, not just watching it.

There are a few things working in favor of this move:

– We haven’t had a real “fear buy” all year. It’s been fill-ins the whole way. Even with tight items, the trade has stayed patient. That leaves the door open—if demand picks up even marginally, this thing can go.

– Logistically, trucking remains a mess. The spread-out supply chain is limiting the typical fill-in business. That can flip the script quickly and turn into a short-term chase if availability tightens in the wrong spots.

– Seasonally, this isn’t the time to be defensive on cash. Summer shutdowns are more robust today and can tighten things up.

Bottom line: the breakout matters—but the market lacks any conviction . If the specs show up, we can extend. If not, we will be talking about the next “big one to come again.”

Technical:

On the technical side, it helps explain why these rallies struggle to stick.

An RSI pushing 78% on just a $20 move isn’t normal. You took a five-week dead market and drove it straight into overbought territory in a handful of sessions. That kind of compression + quick release tends to exhaust itself early—not build into a sustained leg higher.

That said, it’s been so long since we’ve had any real follow-through that fading this outright feels premature. That said, the Sept premium starting to widen should be at least looked at. 

This market needs to keep rallying.

Let’s start with a close above 610 in July. Hold that, and you can begin talking about extension. Fail there, and this risks being another quick pop that runs out of gas just like the others.

Weekly Recap:

Key Takeaways:

On Friday, May futures expired a buck over July. That means that there is no downside gap to go after. Also, the spread traded +4. We haven’t seen that since Sept of 2023. A case is building for less bad…

Housing data continues to grind along—not hot, not falling apart. 2026 is pacing slightly ahead of last year, but the bigger story remains margin compression. Costs are sticky, financing isn’t getting easier, and the entire chain is operating lean. Demand is there, but conviction is thin. This isn’t a demand problem—it’s a willingness problem. Nobody is comfortable. Dealers are hand to mouth; builders are managing starts carefully, and big boxes are still questioning turns versus dollars. The “feel” of the market is cautious participation—everyone’s involved, just with one foot in. We only see a trade when values dip into perceived replacement. There bids show up quickly, confirming underlying need. The lack of follow-through higher speaks more to positioning than fundamentals. Right or wrong structure remains the story.

Bottom Line
This is a low-conviction, high-cost environment. The market isn’t breaking—it’s grinding. Choppy trade, quick reactions to value, and limited downside follow-through remain the base case. The futures trade is confirming. The question is if the May trade means anything or not.

Technical
The market is flat. Price action continues to compress after repeated lower highs, but the pace of the declines is slowing. That flattening suggests selling pressure is losing momentum. Key levels are tightening, and the market feels like it’s coiling rather than trending. A push through recent highs would likely draw in momentum buyers, while dips are still being met with value-driven support. The wedge trendlines now sit at 596.90 and 558.30.

The lumber market doesn’t grind and then spike. A grind is usually met with more grinding. Lumber needs news to generate interest. So right now, we are looking at a close over 597 to push futures up to the 602 point etc. Last week’s low in May was 574.

Lots of verbiage for “same shit, different day.”