Investors may want to use any weakness in lumber trades as a buy opportunity.
That includes ETFs, such as the iShares Global Timber & Forestry ETF (WOOD), Invesco MSCI Global Timber ETF (CUT), and Weyerhauser (WY).
All as lumber prices continue to explode higher.
As we noted on April 19:
According to Fortune, “Lumberyards and homebuilders alike have delayed buying lumber from sawmills in hopes the price of the sky-high commodity would finally come back down to earth. It hasn’t budged, and now the buying rush is on ahead of spring and summer projects.”
Unfortunately, prices aren’t likely to come down any time soon, with May 2021 lumber futures now up to $1,500.05 per thousand foot board, reports The Wall Street Journal. Not only is that an all-time high, but it’s about four times the typical price this time of year, they added.
“Not only has it surprised me, it’s just surprised the whole industry, how quickly we came roaring back. Housing and construction, repair and remodel, that’s where so much money was pointed by American consumers that the sheer scale of demand was hard to fathom,” Stinson Dean, CEO of Deacon Lumber, as quoted by Vox.com.
Worse, according to the National Association of Home Builders (NAHB), skyrocketing lumber prices just added about $35,872 to the price of an average new home.
With demand only accelerating, lumber prices could see higher highs.
Some of the best ways to trade that potential is with ETFs, such as the iShares Global Timber & Forestry ETF (WOOD), Invesco MSCI Global Timber ETF (CUT), and Weyerhauser (WY).
There’s no telling when lumber prices will start to pull back.