Lumber Rally Rages On
Feb. 03, 1993
Undated (AP) _ A record-smashing rally in lumber prices raged on Wednesday as futures prices leaped the permitted daily limit for the eighth straight day on the Chicago Mercantile Exchange.
On other commodity markets, grains and soybean were mostly higher; livestock and meat futures were mixed; oil futures retreated; and precious metals fell.
Spruce two-by-fours for March delivery rose $5 to $318.50 per 1,000 board feet.
The Merc announced after the close of trading that it was expanding the daily price limit for lumber futures to $10 for the next two trading sessions. The limit would expand further, to $15, if two or more contract months close at the $10 limit on Friday.
Lumber sold on the cash market for as much as $364 per 1,000 board feet as wholesalers continued to pay up for tight supplies, said Curt Cunningham, president of Pacific Futures Trading Co. in Seattle.
He said mills in the Pacific Northwest and British Columbia were taking only enough orders each day to cover one day's production, and customers were waiting four weeks to have orders filled.
Lumber prices have climbed steadily since early November as signs of economic recovery sent dealers scrambling for supplies reduced by logging bans in the Northwest.
Federal timber sales in the Northwest and California plunged 57 percent in fiscal 1992, mainly due to a court-ordered logging halt while timber interests and environmentalists fought over preservation of ancient forests and the northern spotted owl. Those disputes are still unresolved.
On Monday, the Washington state Board of Natural Resources announced it would remove 140 million board feet of state-owned timber from this year's sales list, further reducing the lumber supply.
''A major amount of timber has been removed from the public domain for cutting,'' said Ted Bloch, president of Bloch Lumber Co., a Chicago wholesaler.
''People have been talking about this now for four or five years and it was almost like the boy who cried wolf,'' he said. ''But this year it's caught up and the wolf is in the sheep fold.''
Grain and soybean futures settled mostly higher on the Chicago Board of Trade after Agriculture Secretary Mike Espy said his agency was eyeing several options for reviving grain sales to Russia.
Espy commented on the 2-month-old disruption in sales after three banks made claims for $354,000 against the United States government for defaults on loans made to Russia to buy U.S. farm goods.
The USDA halted credit sales of grain to Russia when the Russians began falling behind in repaying the loans. The defaults now total more than $258 million.
Wheat for March delivery rose 2 cents to settle at $3.75 1/4 a bushel; March corn rose 1/4 cent to $2.13 a bushel; March oats ended unchanged at $1.40 a bushel; March soybeans rose 2 1/2 cents to $5.74 1/2 a bushel.
On the Chicago Mercantile Exchange, February live cattle rose .55 cent to 79.97 cents a pound; March feeder cattle rose .67 cent to 85.07 cents a pound; February live hogs fell .02 cent to 43.60 cents a pound; February frozen pork bellies rose .30 cent to 35.02 cents a pound.
Oil prices finished little changed in quiet dealing on the New York Mercantile Exchange.
Light sweet crude oil for March delivery fell 7 cents to $19.93 per barrel; March heating oil rose .12 cent to 55.98 cents a gallon; March unleaded gasoline fell .06 cent to 55.85 cents a gallon; March natural gas rose 1.4 cents to $1.583 per 1,000 cubic feet.
On New York's Commodity Exchange, February gold fell $1.10 to $329.30 a troy ounce; March silver dropped 1 cent to $3.662 a troy ounce.