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Lumber Futures Down For Now. Oil On The Swing.

J.M. Huber Corporation

United States Of America – Crude prices have swung up to $114 a barrel on Thursday, following a 5% gain the day before, and volatility is expected to continue as traders take profits and the conflict in Ukraine continues. The war crimes conflict in Ukraine sparked worldwide outrage and sanctions around the world as markets and people would rather remove the source from the overall economic equation then deal with the constant threats and volatility.

President Joe Biden is meeting with NATO members right now to cement collaboration and announce new penalties against Russia. According to Bloomberg, US national security adviser Jake Sullivan stated that an agreement between the EU and the US to assure natural gas supply may be announced as early as Friday, but a EU oil embargo on Russia appears to be scalable.

The Atlantic Council states in a October 13, 2020 article several key background points resulting in previously predicted energy threats in an article titled “Putin’s pipeline is a strategic weapon. It must be stopped”.

Progress in Iran nuclear talks, a pause in Kazakhstan’s Caspian Pipeline Consortium Terminal owing to storm damage, China’s largest coronavirus outbreak to date, and decreased US crude stockpiles are all factors that investors consider.

Oil Future contracts are a “grey” due to the nature of trading and transparency. The benchmark used for US crude, West Texas Intermediate (WTI), is the most actively traded commodity in the world. The data source Trading Economics Crude Oil prices, are calculated using over-the-counter (OTC) and contract for difference (CFD) financial instruments that were designed to serve as a guideline only, not as a foundation for making trading choices. This adds fuel to the inflation fire in modern consumer retail prices with large surface area for market manipulation and profiteering. Trading Economics states that it makes no attempt to validate data and expressly disclaims any responsibility to do so but markets are largely based on non-transparent data.

Lumber

Lumber has been in a nice free fall over the last few weeks. The signs are welcoming to developers and regulators. Modernization of forestry and logging sustainability techniques, trade strategy and new sustainable products like mass timber and pulp related products and new structural flowables will continue to be emerging markets with a key to slowing inflation while reducing costs.

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After the latest statistics indicated to a slowdown in the housing sector as mortgage rates surged to multi-year highs, Chicago lumber futures fell to $1,050 per thousand board feet, the lowest in seven weeks.

According to data from the US Commerce Department, new home sales in the United States fell 2% from a month earlier to a seasonally adjusted annual rate of 772 thousand in February 2022, the second month of declines and below market estimates of 810 thousand.

Futures contracts on the CME board due show futures range currently from MAY 2022 $1054.30 to May 2023 at $700.10

Month Options Chart Last Change Prior
Settle
Open High Low Volume Updated

MAY 2022
LBSK2

1054.30
0
06:00:00 CT
24 Mar 2022

JUL 2022
LBSN2

883.00
0
06:00:00 CT
24 Mar 2022

SEP 2022
LBSU2

827.30
0
06:00:00 CT
24 Mar 2022

NOV 2022
LBSX2

796.40
0
06:00:00 CT
24 Mar 2022

JAN 2023
LBSF3

800.10
0
06:00:00 CT
24 Mar 2022

MAR 2023
LBSH3

800.10
0
06:00:00 CT
24 Mar 2022

MAY 2023
LBSK3

700.10
0
06:00:00 CT
24 Mar 2022

The natural economic climate most likely still has wildly strong growth and inflation risk regardless of future Ukraine conflicts with Russia as currently Russian lumber has been eliminated from being imported to the markets since early March and labeled “Conflict Lumber.”

Even with the threat of previous threats slowing with a scalable approach the recent price drop the United States still will have to tend to record Infrastructure and Housing demand that will continue to accumulate. Markets will be pressured to re-engineer markets while expanding emerging sustainable products in order to continue or manage any trends.

Recent toolbox switches from the FED have also allowed more targeted reaction based inflation tools to help steer market conditions as well.

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