Fewer Hands

Calmer markets through much of this week had at least some traders wondering if unseasonably high lumber prices were due for a correction. By Thursday afternoon however, rumors of at least one producer’s pending ‘announcement’ of large volumes sold to China ignited another flurry of buying. With supply of wood in the hands of fewer, larger producers, the impact of one large sale offshore is perhaps greater than at any other time. If anything, the revamped  landscape for supply variables probably contributes to a greater inelasticity for product pricing. In the meantime, U.S. markets continue to lend broadly-based support to demand on this continent. At the same time traders are cognizant of seasonal weather patterns that can come into play in dramatic fashion at this time of year.

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