Lumber: New Record Highs as Speculation Remains Feverish

Robert Petrucci

Lumber has exploded higher since the middle of January 2021 and its value is at an all-time record high as speculation has become feverish.

Before there were cryptocurrencies to wager on, the world of commodities offered speculators a place to bet on volatile changes in value which could test the endurance of the strongest individual. In the world of commodities, which has a well-earned reputation for producing massive changes in prices which can make fortunes or cost fortunes, lumber has a special place in the sun as one of the most violent commodities to trade.

Lumber is now at all-time highs and, since the middle of January this year, the price of random length lumber per 1000 board feet has gone from nearly 630.0 to 1420.0 USD. Trading lumber is not for the weak; speculators need to be ready for vast and swift changes in values. Lumber contracts trade via the CME and the commodity often produces limit up and limit down moves which can lock traders into positions which can become rather uncomfortable and costly, to put it mildly.

Having said the above, lumber can also produce earth-shattering profits for the lucky trader. With the commodity traversing record high values, charting lumber technically becomes a bit of a guessing game when trying to take into consideration resistance levels. Lumber may sound like a boring commodity, but it moves at a lightning pace. Due to its lack of large trading volumes, lumber is not immune to price manipulation by large players who have a legacy of having caused havoc. The current price of lumber is traversing near the 1420.0 juncture, and resistance above could prove to be 1440.0 to the 1475.0 mark.

However, the psychological level of 1500.0 could prove to be enticing for speculators too as a higher target. Traders are urged to only use limit orders when participating in lumber. Price fills can be rather sketchy and have a notorious reputation for not matching expectations if limit orders are not used. Take-profit and stop-loss orders are also a key tactical element when trading lumber.

Conservative traders, if there is such a thing within the lumber market, may want to wait for pullbacks to support levels if they are contemplating buying positions and trying to ride the trend higher. Speculators who have the courage to step in front of the bullish trend in lumber and want to sell the commodity via CFD’s on their broker’s platform are urged to also use all of their risk management tools wisely. The price of lumber has climbed, the US housing market is strong and speculative positions have become massive in the commodity.

Lumber Short-Term Outlook:

Current Resistance:  1440.0

Current Support:  1384.0

High Target:  1475.0

Low Target:  1325.0

Lumber

Robert Petrucci
Robert Petrucci has worked in the Forex, commodity, and financial profession since 1993. Important aspects of his work involve risk analysis and advisory services. As an advisor in a Family Office he maintains a conservative approach for wealth management and investments. Robert also works in private finance with investors and companies delivering financial and management services.

Did you like what you read? Let us know what you think!

exclamation mark

Please make sure your comments are appropriate and that they do not promote services or products, political parties, campaign material or ballot propositions. Comments that contain abusive, vulgar, offensive, threatening or harassing language, or personal attacks of any kind will be deleted. Comments including inappropriate will also be removed.

0 User comments

exclamation mark

Please make sure your comments are appropriate and that they do not promote services or products, political parties, campaign material or ballot propositions. Comments that contain abusive, vulgar, offensive, threatening or harassing language, or personal attacks of any kind will be deleted. Comments including inappropriate will also be removed.

Read more
Add new comment
This site is protected by reCAPTCHA and the Google Privacy Policy and Terms of Service apply.