Lumber Prices Approaching Four-Year Highs

Dennis Gartman points out that lumber prices are rising in his newsletter today. The chart below (NAHB data here) shows that lumber prices are indeed rising, and are approaching four-year highs. CME lumber futures prices have doubled since early 2009, and random length lumber prices have increased by 80%. Here’s one explanation from Reuters:

“Industry analysts have said that while the higher prices are encouraging, they likely reflect reduced production capacity rather than significant increased demand for the wood used largely in housing construction. Sawmills across Canada and the United States have cut production or shutdown completely over the past three years because of the U.S. housing market collapse.”