CME Lumber Review: Ends Narrowly Mixed In Quiet Trade

KANSAS CITY (Dow Jones)--Chicago Mercantile Exchange lumber futures prices closed narrowly mixed Wednesday after the lowest housing starts report in years.

The nearby January contract rose $0.20 per 1,000 board feet to close at $199.90, while March settled $0.50 higher, at $216.60. May settled $2.40 lower at $233.60.

Brokers and floor traders said volume was light, reflecting the action in the cash market.

Some speculative short covering and light commercial buying lent support to the market, they said.

Before the market opened Wednesday, the U.S. Commerce Department issued its October housing starts report showing a seasonally adjusted 4.5% decline in starts to 791,000 units. The move was in line with industry estimates and did not cause much of a wave in the lumber futures pit, which dropped sharply Tuesday, perhaps in anticipation of the low level of starts, a broker said.

Technical signals indicate the market could peel back a little more before hitting technical support, a floor trader said, maybe to the low $190s in the January contract.

Some buyers were willing to own more wood if the January contract moves lower, a broker said, but for the time being they are content with their inventories and level of undelivered orders.

During the session, the January/March spread traded 150 times in a range from $15 to $16, premium March, and closed at $16.70.

"A handful" of March/May spreads were done at $15.80, premium May, a floor trader said. This spread closed at $17.

Dow Jones Newswires published a price for British Columbia spruce-pine-fir 2x4s of $190 to $195, unchanged from Tuesday.

 
       CLOSE    CHANGE      HIGH     LOW 
   JAN 199.90   up  0.20    200.40   197.80 
   MAR 216.60   up  0.50    216.70   214.40 
   MAY 233.60   dn  2.40    233.60   231.50 
 

-By Lester Aldrich, Dow Jones Newswires; 913-322-5179; lester.aldrich@dowjones.com

(END) Dow Jones Newswires

November 19, 2008 15:32 ET (20:32 GMT)


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