Learn About Futures Insider for December 15, 2011: Lumber ( Part 3)

[learnfuturesfk]

Key terms for the lumber market include:

MBF - an abbreviation for 1,000 board feet of lumber (not one million) which is about 83.33 cubic feet or 2.36 cubic meters. Board feet is a common measurement of lumber volume, 144 cubic inches. Lumber is normally specified in its rough size before drying, which is why a finished board is normally smaller than the quoted dimensions.

Hardwood & Softwood - ways to describe wood from different trees. In general, softwoods are often from conifers like pine, fir, and spruce. Hardwoods are most likely from deciduous trees like ash, birch, or cherry. The terms are not always based on actual hardness of the wood e.g. balsa is a hardwood but much softer than a softwood like yew.

Key Uses

Lumber is primarily destined for structural construction applications.

Key Concerns

Environmental Concerns: The impact of the forestry industry as well as logging practices comes under regular scrutiny and can often spark a number of strong arguments.

Trade Concerns: Issues concerning softwood imports, exports, and applicable duties can often bring volatility. Trade discussions or issues between the United States and Canada are often worthy of note.

Industry Reports: The possible demand and usage within construction reports may bring price volatility. The reports of new home sales and new construction from the US Census Bureau are worth noting as well as the production reports from western wood manufacturers.

Weather: Price volatility is also possible during periods surrounding extreme weather events such as hurricanes, tsunamis, and earthquakes as they related to the overall destruction and perceived rebuilding requirements.

Disclaimer: There is a substantial risk of loss in futures trading and it is not suitable for all investors. Losses can exceed your account size and/or margin requirements. Commodities trading can be extremely risky and is not for everyone. Some trading strategies have unlimited risk. Educate yourself on the risks and rewards of such investing prior to trading. Futures Press Inc., the publisher, and/or its affiliates, staff or anyone associated with Futures Press, Inc. or www.learnaboutfutures.com, do not guarantee profits or pre-determined loss points, and are not held monetarily responsible for the trading losses of others (subscribers or otherwise). Past results are by no means indicative of potential future returns. Fundamental factors, seasonal and weather trends, and current events may have already been factored into the markets. Information provided is compiled by sources believed to be reliable. Futures Press, Inc., and/or its principals, assume no responsibility for any errors or omissions as the information may not be complete or events may have been canceled or rescheduled. Any copy, reprint, broadcast or distribution of this report of any kind is prohibited without the expressed written consent of Futures Press, Inc.

[pawancarrot]

very good post.