Lumber Futures Looking Bright

Lumber futures are heading for their second-straight monthly gain at a time when gloom from the coronavirus pandemic was expected to curb demand. With a gain of 15% in April and another straight gain of 15% this past month, lumber commodities are some of the best performing according to those tracked by Bloomberg. Aggressive supply cuts from big producers such as West Fraser Timber Co. and Canfor Corp. have tightened supplies at a time when people staying in and deciding to fix up their homes, said Kevin Mason, managing director of Vancouver-based ERA Forest. Renovations have taken hold in the market with people staying put in their homes and ideas flowing. Existing-home sales plunged in April and will likely bottom out in May. They fell 17.8% in April to a seasonally adjusted rate of 4.33 million. Compared with a year ago, sales are down 17.2%. Renovations make more economic sense despite the low-interest rate loans being granted. We will see where Q2 ends which is a good indicator of the back half of the year.

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