The Ro-Mac Lumber & Supply, Inc. Wood Commodity Index (Index) for Central Florida in November increased 7.4% to $301.41 per thousand, as the markets struggled to find a direction. The problem with the late fall run is that half of the items in the market are not participating, which suggests momentum for price increases will wane. Economic reports and terrorism threats, coupled with the holidays and winter, will probably be enough to snuff out any heat in the market.
The dimensional wood portion of the Index increased 6.5% to $307.59, as spruce had solid gains. The gains in spruce were mixed (depending on the size) with odd lengths adding $9 per thousand while the more popular lengths increased $27 per thousand. The supply side of the spruce equation is still in full demand, and mills will be searching for buyers as the snow falls.
The sheathing market has a split personality. OSB sheathing added $27-$36 per thousand (depending on the panel thickness) while CDX pine stayed flat-to-down $6 per thousand over the last 30 days. The move in plywood is troubling, because it suggests the price could be more about supply balance than demand. If CDX plywood prices continue to retreat, expect OSB to follow suit.
The price momentum for the last 30 days does not appear sustainable, and the numbers are indicating a retreat may be at hand. Be careful about long-term quotes. Now is probably not a good time to have a large stocking position.
Don Magruder is the Chief Executive Officer of Ro-Mac Lumber & Supply, Inc. in Central Florida (www.romaclumber.com), and he is a former President of the Southeast Mississippi Home Builders Association, and past Associate Vice President of the Home Builders Association of Lake County. To contact Magruder, email him at