FX.co ★ Lumber Retreats from 3-Month High

Lumber futures declined to around $590 per thousand board feet, retreating from their three-month high of $614.5 recorded on January 20th. This shift is attributable to weakening US housing data and the diminishing impact of prior restocking activities. In December, pending home sales experienced a substantial 9.3% drop compared to the previous month, the most significant decline since April 2020. This downturn indicates a reduction in transaction activity and dampened construction demand expectations leading into the spring building season. The physical market has similarly cooled, with distributors observing quieter order books even as mills maintain steady production rates to replenish inventories following a period of scarcity, temporarily easing supply constraints. The pullback is further supported by profit-taking following the January surge, with decreased trading volumes and open interest suggesting that investors are unwinding positions instead of initiating a new wave of bearish selling.