Survey question: “Given current market conditions and your 2-month sales expectations vs inventory position, both received and on order (including contracts), are you: under bought, over bought or adequately bought?”
There were 216 replies including every aspect of lumber handlers from turnkey framer to producer (relating to log decks, capacity, and order flow).
The results were shocking in several ways. The first consideration was, “Everyone talks their position.” Over bought…bullish. Under bought…bearish, Adequately bought…just what it says.
Along with the answers were many explanations.
•Under bought was consistently a supply issue; not a choice, rather a lack willing sellers. Not bearish position talking. Bullish for the market; needing and willing to buy.
•Over bought respondents to a person offered no explanation…bearish for the market…not buying.
•Adequately bought was either a sense of satisfaction or leaning towards under bought…neutral for the market.
Under bought Total 88… 41%
Over bought Total 5 … 2%
Adequately bought Total 123 … 57%
Our lumber market will top only when it becomes over bought or the masses are bullish. For the sake of argument let’s add adequately bought and over bought together. That removes them as potential buyers. Still, 41% consider their inventory under bought, which makes them active buyers.
Conclusion: The lumber market is NOT Over bought or overly bullish at this point.
Publisher, Layman’s Lumber Guide