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Don’t Forget! You Saw it in the
February 2018 #10223 Page #81
Lumber Briefs
LAYMAN'S LUMBER MARKET BRIEF By Matt Layman Publisher, Layman’s Lumber Guide COMPONENT MANUFACTURER'S EDITION
What Could Go Wrong? vs. Nothing Could Go Wrong! What Could Go Wrong? vs. Nothing Could Go Wrong! Matt Layman, Publisher February 2018
"What is the lumber market going to do?" is a Lumber buyers' focus is on price direction, very important question and the answer very anticipated lumber usage, and ability toquestion pay “What isisthe lumber market going to do?” is storage, a very important simple. It is going to rise andand fall.the Brilliant, right? for it overItaisspecific time.fall. Brilliant, right? answer is very simple. goingperiod to riseof and A better question might be, "How far will My focus is on the collective attitude of lumber lumber prices rise and fall?" That answer requires buyers. As long as that attitude is, "Business is very an understanding of direction and momentum. For good, what gorequires wrong?" remain bullish. better question might be, “How far will lumber prices rise andBUT fall?” Thatcould answer anIunderstanding of direction andexample, momentum. example, backwas in December was that 2x4#2 in Canadareduces and the U.S. would reach FOB mill my For forecast backmy inforecast December that Why? Apprehension the likelihood of $600 an over by2x4#2 spring 2018. That conclusion waswould based reach upon my expectationbought that prices would rise December through Mayprice at an average rate in Canada and the U.S. $600 condition, which is needed to stall of FOB $5/mbft a short digestion in early January. So far, the January pause was more brief than expected and buying has millper byweek, springwith 2018. That conclusion was advances. based upon my expectation that prices would rise been steady as expected, even through the winter storms. When buyer attitudes become, "Nothing can go December through May at an average rate of wrong." I become bearish. That when lumberarrogant Which brings us to the most important question, “When will our lumber market rise and fall?” It is would beour incredibly $5/mbft per week, with a short digestion in early marketand becomes bought price being stall a good of me to say “I know” something you don’t know about lumber supply demand.over I do not. The causing differencethat between January. So far, the January pause was more brief and potential reversal. lumber buyer and a good lumber market analyst is what we focus on. than expected and buying has been steady as My objective is to identify likely reversal and Lumber buyers’ focus is onthe price direction, anticipated lumber usage, storage,areas and ability to pay for it over a specific period of time. expected, even through winter storms. acceleration to help buyers make informed MyWhich focus brings is on the attitude of lumber buyers. As long as that attitude is, “Business is very good, BUT what could go uscollective to the most important question, decisions wrong?” remain Apprehension reduces an over bought condition, which is of needed to stall "WhenI will ourbullish. lumberWhy? market rise and fall." It the likelihood Theofbuyer sentiment I see at the end January for price advances. would be incredibly arrogant of me to say "I know" early spring is "business is good, but what could go something you don't know about lumber supply and wrong." Collectively, buyers are not piling on with a bought When buyer attitudes become, “Nothing can go wrong,” I become bearish. That is when our lumber market becomes over demand. I do not. The difference between being a "nothing could go wrong" appetite for lumber. For that causing that price stall and potential reversal. good lumber buyer and a good lumber market reason, I remain bullish and maintain...$600 will be the My objective to identify likely reversal and acceleration areas to help buyers make informed decisions. analyst is whatiswe focus on. asking price at the mills for 2x4#2 by early spring. The buyer sentiment I see at the end of January for early spring is “business is good, but what could go wrong.” Collectively, buyers are not piling on with a “nothing could go wrong” appetite for lumber. For that reason, I remain bullish and maintain...$600 will be the asking price at the mills for 2x4#2 by early spring. Looking Forward...ML Looking Forward ...ml
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(FTP) Forecasted Time & Price 2017-18 vs. Composite (2x4's #2 SYP-E, SPF-W, Dry Hem Fir, Green Doug Fir.) 2017-18. Vertical arrows project time-major turning weeks. Red squares project price based upon forecasted direction and average price change of $6 per week. Green Zone=Increasing Demand #07-36 Red Zone = Decreasing Demand Weeks #37-06 Yellow Zone=Daylight Savings Weeks #11 Through Week #44.
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A veteran lumberman, Matt Layman publishes Layman's Lumber Guide, the weekly forecasts and buying advisories that help component Layman's Lumber Guide...Matt Layman, Publisher PO Box 905, Belmont, NC 28012 Phone or 336-516-6684 Fax: 888-811-6917 or distribution isor unlawful without permission. manufacturers save money onText: lumber purchases every day.Email: You matt@laymansguide.org can reach Matt atReprint 336-516-6684 matt@laymansguide.org. www.laymansguide.org
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