I think the next move for lumber prices is down but I wouldn’t bet my life on it. Overall business should be awesome in 2022 so don’t let a few down days ruin your week. There’s going to be plenty of opportunities for everyone.
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You heard it here first folks 
The top of the roller coaster ride certainly has a beautiful view!
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No doubt prices seem top heavy and mill oder files are not equal to the 6-wks or sooner shipment offerings. My concern is that builders keep insisting that suppliers not run out of wood to the point of committing 90-days ahead. 90 days is the max their suppliers can commit space and money. Builders appear willing to pay up and out. Right now, their focus is on completions which are the lowest in 2021 since record keeping began 53 years ago…81% Starts/Completion Ratio. December completions have exceeded starts EVERY year. Conclusion is: builders are more focused on finishing than starting new homes and projects during the winter. That is why I refer to January as CHAOTIC! Builders and suppliers are sending and getting mixed signals, which can certainly “feel” like weakness ahead.
I’m with you Mike, I wouldn’t bet my life, or any of my wallet, against the seasonal up trend through end of February, with January Chaos coming up.
Looking Forward,
ML
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Incredible insights here @Matt_Layman! Lots to unpack here! I just subscribed to laymansguide.com to learn more.
How far out do you think mill order files are?
If some buyers are committing to 90 days out at these prices, then where does that leave supplier yards. Are you saying supplier yards are full of sold inventory 90 days out or rather supplier yards are getting filled with 90 day orders or something else?
If supplier inventories are at 90 days, then does this reduce the risk of short squeeze?
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Mill order files are at best 2.5 weeks…likely less. Once order files reach two weeks, mill sell about 50% of production. As those 50% weeks move forward, prompt shipments develop allowing producers to sell prompt wood at higher current prices and ship around orders previously taken for 6-weeks or sooner. I expect rebuttal, nevertheless, that is why mill order files decay so quickly. It is happening already. Prompt cars and trucks showing this week, when last week was 6 wks or sooner shipment or off the market. ml
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I’m saying the first round of winter buying is sold. The wood at the LBM dealers is not speculatively over bought. The pause we feel right now is builder focus on completions to collect money for the next round of panic building this spring. January Chaos applies to mills and LBM dealers, contractor yards, wholesalers. Builders are very clear, Q1 is in the bag. Affordability is only applicable to first time home buyers. Until builders get price rejection in the form of lower sales, they will continue to feed the lumber market. This is not the time to reduce inventory, rather look for a $100-200 January under-the-covers offering to buy.
ML
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Andrew,
Welcome to the back room.
ML
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Beautiful view, but what if you’re strapped to the nose of the front car? 
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Best seat on the ride!
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That’s really interesting, I’ve never considered the strategy of this “unlisted” inventory, but it makes sense and fits my experience. On the flip side, when order files retreat back to that 2-3 week mark is when inbound calls start to come in and new inventory begins to “appear” like holiday gifts under the Christmas Tree! Where did it come from? Santa?
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As a wise man once said “Buy the dip!”
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