CHICAGO May 24 U.S. lumber futures fell nearly
2 percent on Friday, capping their deepest streak of losses in
1-1/2 years as a resurgence in the domestic housing market was
overshadowed by plunging wood exports from the U.S. West Coast,
Benchmark prices for the building material dipped
below the threshold of $300 per thousand board feet for the
first time since October at the Chicago Mercantile Exchange and
have declined more than 25 percent since notching an eight-year
high of $400.80 per tbf in February.
"Lumber didn't belong so high originally," said Robin Cross,
chief operating officer at brokerage Paul Court Company in
Chicago. "We hyperextended to the upside and now production is
Log exports during the first quarter of the year fell 33
percent to 242 million board feet from the U.S. West Coast's top
export markets, according to Xiaoping Zhou, a research economist
at the U.S. Forest Service in Portland, Oregon.
"(Importers) are searching for supply from other regions
because prices are up," Zhou said.
Overall U.S. lumber exports were up 11 percent during the
first quarter of 2013 but fewer sales from the West Coast, the
most direct shipping route to important Asian destinations such
as China, weighed on lumber futures.
Stock prices for domestic homebuilders and building
materials companies are on the rise due to growing optimism
about new-home construction and house buying. Luxury homebuilder
Toll Brothers Inc reported stronger-than-expected
earnings this week and the highest quarterly orders in seven
However, gains in lumber prices earlier this year led some
lumber mills to ramp up production even as demand for wood
slowed amid rallying futures.
CME lumber for July delivery on Friday settled $5.80
lower at $297.40 per tbf, the lowest price since Oct. 24.
"Demand got tapered with the price. Until we see an uptick
in demand, the market is going sideways to lower," Cross said
from the trading floor in Chicago.