Evaluation
November was a funky weather month. The east fielded above average rainfall, the western mountains got some snow, even though most temperatures were above average over the entire nation. There are pockets of pent up demand, like northern TX and Oklahoma, although on the whole, dealers and distributors are beginning December with less inventory than a month ago.
The pipeline is lean and production for this month will be about 25% off the annual monthly pace.
30-Day Strategy – December
December historically transitions from the bull market correction into a resumption and acceleration of the bull market. We expect lumber and OSB to become less available as year end approaches and prices to firm.
30-Day Buys: Shift to early week purchasing the second week of the month and maintain that strategy into the first week of January.
30-Day Bids: Quote 30-day jobs with a 5% adder expecting a $20 cost increase by month-end
60-Day Strategy – January
Early January should continue higher with just-in-time and just-past-time buyers fueling the fire. The latter half of the month should weaken while buyers digest purchases and manage winter weather.
60-Day Buys: January needs would best be covered now, as cash and space permits.
60-Day Bids: January job quotes should carry an additional 5% price increase over today's prices as inventory costs will be higher.
90-Day Strategy – February
After a January month-end correction, February should find a strong spring preparation rally. Dealers and distributors will make preemptive inventory accumulations weeks before production is fully regained.
90-Day Buys: February needs would also be best covered in early December if possible. Otherwise, buy early in the week to minimize price increases.
90-Day Bids: Beware of extending winter bids at current prices. Add 10–15% for February job deliveries.