M ACdverti$er
Th e
omponent
anufacturing
February 1st, 2016 #09199 Page #39
Adverti$er
Don’t Forget! You Saw it in the
Published by Layman's Lumber Guide Forecasting Suite
LAYMAN'S LUMBER MARKET BRIEFING Weekly Head Start Softwood Framing Lumber Market Forecast & Trading Strategies Matt Layman, Publisher
Week #04
Sunday
January 24, 2016
Mid-Winter Lumber Rally
Order File, Forecast & Strategy ¥ Producer Order Files... Mills are out of orders. Some are negotiating price for sales, others are trying to wait out the buyers. Winter weather is certainly slowing job sites, however a month of dealer inventory liquidation has created holes to fill. ¥ Forecast... The lumber market is under pressure, at the same time some buyers are getting concerned about being under stocked. Prices should weaken this week and next. Three weeks from now, regardless of weather, buyers will be feeling the urgency of covering over- exposed areas. ¥ Strategy... Get your house in order. Begin to scale-in buy this week and wrap it up the week after, covering needs through mid April to avoid restocking at the top. Mills will likely be counterable early in the week. Counter $10 and buy it.
Snow, ice and cold sent contractors on eastern U.S. job sites running for cover the end of last week. That is not the case country wide, however it is a possibility in 80% of the continental U.S. now through the end of February. One can only ponder, in the depths of winter, how could our lumber market possibly rally? It's all about inventory comfort level in relation to the next six weeks, not the next six days. After a month of inventory liquidation, contractor yards are uncomfortably lean. Replenishment momentum will build in February. The mid-winter lumber rally is not a new bull market, rather the last up leg of the winter bull market. It may not make a new high, nevertheless it should be expected to relieve the downward momentum. The mid winter lumber rally is worth investing in. Looking Forward...ml
Forecasted Decision Points (FDP) 2015-17 Composite SPOT PRICE Composite 2x4's #2 SYP-E, SPF-W, Dry Hem Fir, Green Doug Fir. (Blue). 2015-Current FDP's (Vertical Red Lines), reversals or accelerations, since 01/99: 408 FDP's…351 turns within 1 week. 86% FDP Historical Accuracy. Green Zone=Highest Demand Weeks #10-26; Yellow Zone=Daylight Savings Weeks #10 Through Week #45. Red Zone = Lowest Demand Weeks #45-09. 400 380 360
340 320 300 280
4
8
12
16
20
24
28
32
36
40
44
48
52
4
8
12
16
20
24
28
32
36
40
44
48
52
4
Forecasted Decision Points (FDP's) 2015-17 Oriented Strand Board (OSB) SPOT PRICE OSB. (Blue). 2015-Current FDP's (Vertical Red Lines), reversals or accelerations, since 01/99: 99 FDP's…86 turns within 1 week. 86% FDP Historical Accuracy Green Zone=Highest Demand Weeks #10-26; Yellow Zone=Daylight Savings Weeks #10 Through Week #45; Red Zone=Lowest Demand Weeks #45 290 270 250 230 210 190 170 150
4
8
12
16
20
24
28
32
36
40
44
48
52
4
8
12
16
20
24
28
32
36
40
44
48
52
4
Lumber Market Intelligence...Matt Layman, Publisher PO Box 905, Belmont, NC 28012 Phone or Text: 336-516-6684 Fax: 888-811-6917 Email: matt@laymansguide.org Reprint or distribution is unlawful without permission. www.laymansguide.org TWITTER.com/Laymansguide Join Matt Layman on LinkedIn Product dimensions referred to herein do not imply actual net sizes, rather are commonly used descriptions of the products.
PHONE: 800-289-5627
Read/Subscribe online at www.componentadvertiser.com
FAX: 800-524-4982