What happens if a sawmill sells a lumber futures contract?

Without hedging with the Lumber futures contract, the builder would be subject to an overall price increase of $200.00. A sawmill selling physical lumber could take a short position, or sell futures, to protect against a decrease in price.

Are lumber Futures a risk management tool?

Lumber users, like construction companies who have increased risk with higher lumber prices, should be short Lumber futures. Risk management tools like Lumber futures and options are meant to mitigate adverse cash price movements. The cash price for softwood lumber and the futures price for lumber do not move together.

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Q: How much does lumber cost in March?

Let’s assume in March, the cash price for lumber is $500/mbf and the futures price is $600/mbf. To hedge their summer lumber purchase, the construction company will buy, or go long, 20 July Lumber futures contracts. Fast forward to July, and we see prices have increased. The cash price of lumber has moved to $700/mbf.

Lumber PRICE Today | Lumber Spot Price Chart - Markets Insider

· Conversion. Lumber Price. Price. 1 board foot ≈ 2.359,74 cm³. Lumber Price Per 1 cm³. 0.01 USD.

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· Planning for investment. Despite 2023 declines, a majority of dealers in the LBM 100 indicated they still expect to grow in 2024 and beyond. Nearly a quarter of the LBM 100 added one or more new locations in the past year. Colorado-based Kodiak Building Partners (No.4) led the pack, adding 20 locations in 2023.

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Lumber - Random Length (Globex) Daily Commodity Futures Price Chart : CME

Lumber - Random Length (Globex) (CME) Lumber - Random Length (Globex) (CME) Business day after last trading date of contract. Business day prior to 16th day of the month. Sunday through Thursday from 5:00 p.m. CT to 4:00 p.m. CT the following day. $10.00 per thousand board feet above or below the previous day's settlement price.

Hedging with Lumber futures - CME Group

· To hedge their summer lumber purchase, the construction company will buy, or go long, 20 July Lumber futures contracts. Fast forward to July, and we see prices have increased. The cash price of lumber has moved to $700/mbf. Since cash prices and futures prices are highly correlated, we see the futures contract price has also increased to $800/mbf.

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2 x 4 x 8' #2 Construction Grade Lumber - Schillings

· 2 x 4 x 8′ #2 Construction Grade Lumber. Rated 4.00 out of 5 based on 1 customer rating. ( 1 customer review) $ 3.71. Ideal for framing, roof trusses, and floor joists. Actual Dimensions: 1-1/2″ x 3-1/2″ x 8′. No two pieces are the same. Can be painted or stained. In stock and ready for local delivery or in store pickup.

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