Market Overview*
January 31, 2014
Dry Western Domestic Species
The weeks activity quieted some as Bad weather stretching across half the country put a dent in rail business. Mills relied on trucks sales to continue to add on the existing order files. Random reflected with Inland (2x10 minus $10),California (2x10 and 2x12 minus $10) and Cost Hem Mills ( 2x10 minus $10 and 2x12 minus $7) printing down on wides but holding at or near numbers on narrows. Studs numbers also held close to last week’s levels.
Green Doug Fir
Continued bad weather east kept sales slow giving California buyers a reason to throttle back in hopes of a long awaited pullback. Wides were the most vulnerable with inventory seemingly piling up on mill offer lists. Narrows fared better essentially holding firm, while studs remained the bright spot for the mills. Having said that studs were showing up and mills were offering material into mid-February, happy to take today’s prices for 3 weeks out. Most feel this weakness will be a buying opportunity not a disintegration of the market.
SPF
Activity increased towards weeks end and the mills who discounted their wood took the available business off the street. Rumors of China making a large purchase proved to be unfounded but still moved futures higher and caused dealers to cover some needs. Mixed signals have many in a quandary as to the market's next move. MSR is sitting at a $10 premium over #2 in 1650 in both 2x4 and 2x6. Mills are looking to move off at #2 to make it disappear. With the #2 & btr. market not sure where it's going to go, MSR has little down side risk. January Futures contract closed Wednesday up $0.30.
OSB
OSB sales have slowed and prices have come off in a few markets. Weather issues across the Country have helped to keep demand muted. Mills continued to produce poorly in the cold weather and ice. Trucking was thrown into disarray, but mills made up for this by loading cars. Most mills are into mid-February. Current OSB prices are a value and we expect prices to increase as we move further into the first quarter of 2014. Poor weather has slowed demand, but look past the current market into February and March. Current inventories are low; expect more mill downtime in the next couple of weeks.
Western Plywood
Mills are trying to take a firmer stance on the market. With veneer prices continuing to climb, mills are feeling the squeeze. Activity remains limited due to wintry weather but mills are maintaining one to two week order files. Be aware that any market strength will be met with a strong uptick in price levels. Prices are at or near their lowest levels of the past year. If you are looking for material for February and March, buy it now.
*Source: LMC Market Watch\