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Lumber prices are set for a shakeup with the rollout of new futures contracts
Posted on 7/24/22 at 5:21 pm
Posted on 7/24/22 at 5:21 pm
This sounds like the lumber industry getting ahead of a RE market that is cooling off. The futures market has not been that volatile since interest rates started going up. It seems like they know the market is about to slow even more so they are going to offer smaller contracts since building will continue to slow down.
LINK
quote:
CME Group is launching a new lumber futures contract that could ease price volatility and boost trading volume.
Starting next month, the new contracts will offer one-quarter the amount of wood.
That will allow trucks to make deliveries, instead of just railcars, opening up the potential for more trades.
quote:
Lumber prices have been on a wild ride in the last few years, but they could soon get less volatile, even with trading volume set to soar.
Along with other top commodities, lumber prices have seen big swings since the pandemic. They collapsed below $300 per thousand board feet in early 2020, jumped to $1,000 later that year, crashed again, soared past $1,700 in May 2021, tumbled back down, rebounded to nearly $1,500 in March of this year, plunged yet again, and are now below $600 as the housing market slows down.
Earlier this year, leading lumber futures were so wild that they routinely hit their daily limit-down or limit-up price triggers, freezing trades for the remainder of the session and prompting the industry to look for ways to make the market more liquid.
Now, CME Group is launching a new lumber futures contract August 8 that is meant to facilitate deliveries and draw in more participants, potentially smoothing out prices with a number of changes.
Among them is allowing trucks to fulfill contracts, instead of just railcars. For reference, a truck can carry enough lumber for two houses, while a railcar can carry enough for eight, lumber trader Stinson Dean told Insider.
Since trucks carry about one-quarter the amount of lumber, the new futures contract gives more buyers the ability to hedge off smaller projects that didn't fit the old contract's sizing, he said via email.
LINK
Posted on 7/24/22 at 5:25 pm to stout
Why the frick do we sell wood this way?
Posted on 7/24/22 at 5:28 pm to DontThreadOnMe
All commodities are sold this way and have been for decades.
I knew a homeless man that once bankrupted two brothers trading orange juice futures
I knew a homeless man that once bankrupted two brothers trading orange juice futures
Posted on 7/24/22 at 5:33 pm to stout
quote:
I knew a homeless man that once bankrupted two brothers trading orange juice futures
I heard sone African prince gave them a loan and they’re back in the game.
Posted on 7/24/22 at 5:34 pm to stout
Wood shouldnt be a commodity any more than dirt is.
Posted on 7/24/22 at 5:34 pm to stout
quote:
I knew a homeless man that once bankrupted two brothers trading orange juice futures
Is this a movie reference or a real story?
Posted on 7/24/22 at 5:36 pm to GeauxTigers123
quote:
Is this a movie reference or a real story?
Posted on 7/24/22 at 5:36 pm to DontThreadOnMe
Because there are huge orders of lumber that fill monstrous ships that go all over the world
Posted on 7/24/22 at 5:36 pm to GeauxTigers123
It’s a real story. It’s been in the news.
Posted on 7/24/22 at 5:41 pm to stout
When the frick is plywood coming down??
Posted on 7/24/22 at 5:47 pm to DontThreadOnMe
quote:
Wood shouldnt be a commodity any more than dirt is.
Tell me you don’t know anything about the lumber or dirt industry without telling me you don’t know anything about the dirt or lumber industry.
Posted on 7/24/22 at 5:48 pm to GeauxTigers123
quote:
Is this a movie reference or a real story?
Posted on 7/24/22 at 5:49 pm to DontThreadOnMe
quote:Not sure if serious…
Wood shouldnt be a commodity any more than dirt is.
Why shouldn’t wood be a commodity?
Posted on 7/24/22 at 5:50 pm to stout
1/4 the normal amount of wood
Stout
Stout
Posted on 7/24/22 at 5:56 pm to stout
What are they doing about concrete prices? Can't afford to encase dead bodies these days.
Posted on 7/24/22 at 6:05 pm to pjab
quote:
It’s a real story. It’s been in the news.
Didn't it have something to do with GI Joes with the kung fu grip - maybe oranges? I'll have to check Drudge again.
Posted on 7/24/22 at 6:10 pm to PeteRose
quote:
I heard sone African prince gave them a loan and they’re back in the game.
But he was working at a fast food joint at the time right?
Posted on 7/24/22 at 6:15 pm to stout
quote:
I knew a homeless man that once bankrupted two brothers trading orange juice futures
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