Perhaps the most important question in our lumber industry is: “What's next?”
We are in the heat of the September Surge. That will soon be coming to an end, but the clock doesn't stand still. Lord willing, the sun will rise tomorrow. So, the question is, “What's next?” What should we expect and how do we prepare for it?
This has been an incredible year. It has delivered on our forecast of extreme VOLATILITY. Despite the lumber market’s radical behavior, the Forecasted Time and Price chart (FTP) shown here has been our GPS to keep us on track.
The FTP shows us what is coming next. That is the October Ovation...the grand finale. Currently, buyers are adding inventory to prepare for the October Ovation...the last push before shorter, colder, less productive jobsite days arrive. Some may mistake this as an overreaction to the recent hurricanes. Not so. The hurricanes added momentum to the forecasted trend.
What's next? Continued upwards price movement with smaller weekly gains. Momentum will slow, but direction will not reverse.
So how can the truss plant prepare for the October Ovation? Begin by expecting the trend shown on the FTP to play out. It has been a very reliable tool for us in the past, worthy of trust going forward.
Lumber inventory positioning is crucial in October. Regardless of recent housing data and how it is being interpreted, this month is excellent for lumber demand. Builders will be scrambling to get floors, walls, and roofs installed before late fall’s shorter, colder days arrive, and certainly before winter weather.
What we do not know is if winter will continue its recent warming trend. If so, jobsites will remain busy. If not, the normal November inventory reductions will soften the market.
That is later, now is the October Ovation. Give yourself a hand for a remarkable year. Let’s finish it off with a bang.
Looking Forward ...ml
A veteran lumberman, Matt Layman publishes Layman's Lumber Guide, the weekly forecasts and buying advisories that help component manufacturers save money on lumber purchases every day. You can reach Matt at 336-516-6684 or matt@laymansguide.org.