I final wrote in regards to the lumber market and its worth motion on Barchart on August 21, 2025, the place I concluded with the next:
The offseason for lumber demand is on the horizon. The potential for elevated worth variance as a result of uncertainty created by U.S.-Canada commerce relations stays excessive, and the trail of least resistance of U.S. short-term rates of interest is more likely to be decrease. Time will inform if longer-term charges comply with any Fed Fee cuts over the approaching months. Lumber stays a crucial development materials, and the present worth ranges supply a constructive risk-reward profile. Accumulating lumber-related belongings on a scale-down foundation during times of worth weak point over the approaching weeks and months may very well be optimum for 2026, offered the housing market improves and lumber demand rises.
The active-month lumber futures have been buying and selling at $595 per 1,000 board ft on August 19 and have been decrease, with January futures across the $530 stage in late November. In the meantime, the WOOD and CUT ETFs, in addition to WY shares, have declined since August 19, which might current a chance for 2026.
The each day steady CME bodily lumber futures chart for January 2026 supply highlights a uneven yr.
January 2026 lumber futures have traded in a $527.50 to $699.00 per 1,000 board ft vary in 2025. Lumber futures have been trending decrease since reaching a excessive of $698.50 on August 1, and have been at $532, close to the lows of 2025 in late November. On August 19, the January lumber futures settled at $595.50 and have been 10.7% decrease in late November.
Whereas lumber futures have been below strain, the 2025 vary has been pretty slender, on condition that the random-length lumber futures contract traded to a 2021 excessive of $1,711.20 and a 2022 peak of $1,477.40 per 1,000 board ft. In each years, the low worth was decrease than the 2025 low, highlighting the slender buying and selling vary for wooden costs in 2025.
On August 19, the iShares International Timber & Forestry ETF (WOOD) settled at $74.52 per share.
In late November, the WOOD ETF was 9.1% decrease at $67.74.
On August 19, the Invesco MSCI International Timber ETF (CUT) settled at $30.68 per share.
In late November, the CUT ETF was 9.2% decrease at $27.86 per share.
The WOOD and CUT ETFs stored tempo with the continual bodily lumber futures over the interval.
On August 19, the shares of the Weyerhaeuser Firm (WY) settled at $26.33 per share.
In late November, WY shares have been 18.5% decrease at $21.46 per share. WY has underperformed lumber and the WOOD and CUT ETFs since August 19, 2025.
The case for buying lumber publicity by means of the WOOD and CUT ETFs, and WY shares consists of:
The lumber market tends to succeed in its highs in spring and early summer time and its lows in late fall and winter, pushed by demand in the course of the development season.
Contemplating lumber futures’ worth vary (random-length and bodily) since Could 2021 has been $1,711.20 to $352.50 per 1,000 board ft, lumber futures are quite a bit nearer to the low than the excessive, suggesting that there’s restricted draw back.
U.S. tariffs on Canada, a big lumber provider, might proceed to distort costs, rising worth variance.
The prospects for falling U.S. rates of interest in 2026 might assist new dwelling constructing and lumber demand. Decrease mortgage charges might set off a surge in new dwelling demand.
As lumber is now within the offseason for demand, this may very well be a wonderful time to start accumulating lumber-related belongings for the approaching yr. WY shares have declined essentially the most, making the corporate engaging close to the $21.50 per share stage. WY’s dividend at $0.83 interprets to a 3.9% yield. WY beat EPS and income forecasts in its most up-to-date October 30, 2025, earnings report. The WOOD ETF holds 5.14% of its belongings in WY shares, whereas CUT’s publicity is 4.88%.
If lumber costs get well, WOOD, CUT, and WY shares might transfer increased from present ranges subsequent yr. I favor accumulating these lumber-related belongings on a scale-down foundation, leaving loads of room so as to add on additional declines over the approaching weeks and months, as lumber will stay within the off-demand season till subsequent spring. The highs in 2021 and 2022 have been in Could and March, respectively.
In the meantime, lumber futures stay extremely illiquid, with solely 9,055 contracts of open curiosity, the whole variety of open lengthy and quick positions within the bodily lumber futures market. Whereas illiquidity makes lumber futures extremely harmful, it could actually additionally trigger substantial worth rallies, as affords to promote can evaporate as costs rise.
Because the lumber market heads into winter, decrease lows are probably. Nonetheless, the decrease costs fall, the higher the percentages of a restoration in 2026, as lumber costs may very well be ready for spring to soar.
On the date of publication, Andrew Hecht didn’t have (both immediately or not directly) positions in any of the securities talked about on this article. All data and information on this article is solely for informational functions. This text was initially printed on Barchart.com
