The relentless onset of winter conditions this week did nothing to bolster US and Canadian lumber and panel sales, despite the annual North American Wholesale Lumbermen’s Association meeting being held in Chicago, IL, last week, according building materials price newsletter Madison’s Lumber Reporter.
Prices on almost all standard construction framing commodities remained flat as severe weather hit important markets in the US northeast.
Solid wood traders reported a slow beginning to the week, with a noticeable increase in sales after Wednesday when lumber futures bounced significantly. Reluctant customers were — once again — forced to come to the table to fill unavoidable holes in their inventory. Luckily for them, transportation posed no issues this week and both rail car and truck deliveries were timely.
Log supplies in yards at British Columbian and US northwest sawmills were replenished during the past couple of weeks of cold weather. The rains returned Friday, turning remote logging roads once again to mush. Lumber manufacturers were unconcerned as they expect their current log decks to last through the end of this year.
Terrible storms in the US northeast put an absolute stall to all activity, whether hauling, production, or building. Lumber traders could do nothing but hunker down until the epic snows melt, along with everyone else.
In company news this week, Western Forest Products Inc. (TSX: T.WEF, Stock Forum), out of Vancouver, BC, this week reported revenue of $262.1 million in 3Q 2014, as compared to $239.4 million for 3Q 2013.
The company’s log revenue increased 22 per cent to $66 million during the quarter and lumber revenue increased 5 per cent to $180 million, based on strong demand for the housing repair and renovation sectors, which led to increased volumes and pricing for Western Red Cedar and the company’s moulding and millwork lumber products. Third quarter lumber production was 231 million board feet, an increase of 4 per cent.
As well, Montreal, QC’s, Domtar Corp. (TSX: T.UFS, Stock Forum) announced its support of the position taken this week by the US Environmental Protection Agency that carbon dioxide emissions from sustainably-managed sources of biomass should be considered “neutral” when accounting for greenhouse gas emissions. Wednesday’s memorandum from the EPA recognizes that not all biomass is created equal when it comes to regulating greenhouse gas emissions, according to Domtar company officials.
LUMBER FUTURES COMMENT: Bearish to Bullish
After as Bearish start Lumber Futures ended the week on a Bullish note and then closed higher. The front month January contract settled at $333.00 up $5.60 posting a $13.10 gain for the week. Lumber gapped down on the open Monday due in part to the weak expiration of the “spot” November contract the preceding day and soft cash pricing.
Mixed buying lent support while oversold technical indicators prompted a round of short covering after January held the “spot” months low of $315.30. Basis converged prompting carryover buying in the cash market. As a result Lumber continued to rally on follow through short covering and spread positioning buying January selling March through today’s session. Profit taking Long liquidation into key chart related resistance from $332.00 to $336.00 set the highs.
Vice President Forest Products
Read more at http://www.stockhouse.com/opinion/independent-reports/2014/11/25/lumber-prices-stay-flat-as-severe-weather-wallops-key-markets#JXIRga2cHuF9wTyO.99
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Madison’s Lumber Reporter