RE:RE:Futures up again - $548 for Sept 2020My main question is how long can lumber prices stay elevated like this.
Prices are up because production curtailed on the back of housing demand not declining as expected and demand from home improvement
Once production ramps up that demand should be met and prices should temper.
Housing starts rebounded nicely in the US today. 30 year Mortgage rates hit an all time low. Those are good signs. Single family building rebounding as people wanted to live away from dense urban centres and can work from home.
My question really is how long until this market shock is worked through and what does that look like for producers. 450 usd per mbf?
When home building drops off seasonally, possibly extended a bit due to covid delays, where do things settle? Futures seem to indicate a $500 November price. 450 out to next year. But futures rise and fall on sentiment rather than fundamentals.
I want to believe this rally but also worry that it's short term. I'm a CFF shareholder and sure as hell would like to see the price higher, and the value is there, but I wonder how long prices can last like this. The longer they last the higher the stock prices for all these producers.
CFF still looks like a bargain even if prices are at 450. But the stock will probably correct on a lumber pullback
Hopefully we see some value creation initiatives from management for shareholders come the August meeting.