Lumber Futures That Signaled Pandemic Building Frenzy Goes Out With a Whimper
By
Ryan Dezember WSJ
Wood prices surged early in the pandemic as stuck-at-home Americans remodeled all at once. ((Frederic J. Brown/Agence France-Presse/Getty Images))
That’s curtains for the lumber-futures contract that spiked during Covid, a sign of the inflation, building frenzy and busted supply chains that came to characterize the pandemic economy.
The futures contract— ticker LB—traded 12 times on Monday, adding $5 per thousand board feet to end, forever, at $344. That’s a little less than the average price during the five years prior to 2020, when the lockdown sent lumber prices on a wild ride, and about 80% lower than the peak price notched in 2021.
The outgoing futures, which represent a railcar full of two-by-fours delivered to the British Columbia interior, are being replaced by a contract—ticker LBR— that sends a truck’s worth of wood to Chicago. The switch is meant to boost trading that had gotten impossibly thin and reduce wild price swings in the longtime barometer of wood prices and building activity.