Made-in-U.S.A. Lumber Futures Are Coming to Wall Street — WSJ

Wall Street Journal

By Ryan Dezember

Lumber producers have migrated from Canada to the U.S. South. Now lumber-futures trading is heading to the Southern pineries as well.

The exchange operator CME Group said it would launch trading in Southern yellow pine futures on March 31, a response to rising export taxes on Canadian lumber that have pushed benchmark wood prices well above those paid in the South.

The futures contracts — ticker: SYP — will give the South's loblolly planters, loggers, sawmills, pressure treaters and builders a mechanism to manage their exposure to price swings that is more in line with the local market than existing futures.

The lumber futures that trade now are tied to deliveries of boards made from Northern conifers, namely Canadian spruce, pine and fir. Builders like those species for the wood's light weight and easy nailing. Existing futures exclude Southern yellow pine, which is a lot heavier and preferred for fences and decks because it works well with waterproofing and stain.

Traders and the exchange have for years discussed Southern yellow pine futures as the region's production grew to be more than 36% of North American softwood lumber output.

Now that Northern lumber is a lot more expensive, they are saying the time is right.

"There was a breakdown in the correlation between Southern yellow pine prices and the spruce-pine-fir prices, especially since a lot of it came from Canada," said David Becker, risk-solutions director at Fastmarkets, which owns the lumber-trade publication and pricing service Random Lengths. It reports the Southern pine price benchmark that the new futures will be settled against.

Random Lengths's Southern Pine Composite Index ended last week at $422 per thousand board feet. Lumber futures, meanwhile, rose to a 30-month high, ending Friday at $664 as traders reacted to President Trump's swerving tariff threats.

Canfor, which owns sawmills in Canada and the U.S. South, told investors Friday that it believed lumber was among the products that received a one-month exemption from a 25% tariff Trump placed on Canadian goods earlier in the week.

Chief Executive Susan Yurkovich said customs brokers weren't collecting the 25% tariff. That might not last, though. Later Friday, Trump made fresh threats to add tariffs to Canadian lumber.

Any tariff the president adds would layer on top of existing export taxes on Canadian lumber, which nearly doubled last year, averaging 14.4% between antidumping and countervailing duties.

Duties on Canadian softwood lumber are expected to rise sharply again this year and are a result of the longstanding U.S. contention that Canada's sawmills are unfairly subsidized by the Canadian government, which owns the country's timberland. In the U.S., Douglas fir farms in the Pacific Northwest and Southern pine plantations are in private hands.

Many Canadian mills have been driven out of business in recent years. Wildfires, wood-boring beetles and environmental protections have reduced log supply in Canada's boreal forest while export taxes have lifted the prices sawmills need to break even.

Canfor is among the Canadian sawyers that have been closing mills at home and adding production in the U.S. South, where a glut of pine trees has kept log prices low no matter how high lumber prices have risen. It opened a new $210 million sawmill north of Mobile, Ala., recently and completed the $130 million modernization of another in Arkansas.

Southern yellow pine doesn't always work as a substitute for the Northern species favored by home builders. But traders and sawmill executives said the growing price difference is prompting pockets of buyers to swap, including companies that prefabricate the trusses that hold up roofs.

Unlike the existing lumber futures, which will continue to trade, Southern yellow pine contracts will be settled with cash so hedge funds and other speculators can wager on wood prices without worrying about ending up with truckloads of two-by-fours.

"This is the contract that could have parabolic growth down the road and ultimately dwarf the existing contract," said Greg Kuta, whose Westline Capital Strategies plots futures strategies for lumber producers and big wood users.

While lumber futures have served as a reliable leading indicator for the housing market and offered an early warning of the Covid era's supply-chain chaos, trading has at times been problematically thin.

Three years ago, the market was plagued by sessions in which the price would surge or drop by the daily maximum allowed by exchange rules and stick there, locking traders into positions for days on end.

In 2023, CME replaced those futures, which delivered railcars of Pacific Northwest lumber to a remote rail junction in British Columbia. The current contract is fulfilled with truckloads of a wider range of Northern species delivered to Chicago.

Lumber-futures trading has since become less volatile but still hasn't attracted the same type of broad pool of traders as other commodities, such as oil, copper and natural gas.

Write to Ryan Dezember at ryan.dezember@wsj.com

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EU Natural Gas Extends Rebound

Trading Economics

European natural gas futures rebounded past €40/MWh on Monday from the five-month low of €36.5/MWh touched the prior session amid fresh setbacks to the supply outlook.

Russian forces struck Ukrainian gas infrastructure with drones and missiles, halting flows from the key region.

The attack halted the drop in prices stemmed by a series summits between EU members that raised optimism that the union would step up efforts to seek alternative gas sources outside of Russia.

Gas prices were also pressured by seeming concessions that Brussels may give for Slovakia regarding the source of its gas supply after the Slovak delegation conceded in backing plans for EU defense spending and Ukraine aid.

Additionally, warmer weather through the continent eased demand at the end of the winter, and the possibility that the EU would be less strict about storage targets in coming years.

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Gold Futures Flat as Market Awaits U.S. Economic Data — Market Talk

Dow Jones Newswires

Gold futures are broadly flat in relatively muted trading. Futures are flat on $2,912.10 a troy ounce. The precious metal sits up 0.4% on week on lingering safe-haven demand and a weaker U.S. dollar. That said, gold is trading in a tight range as markets appear to be pricing out the inflationary effect of president Trump's tariff policies given constant reversals, Sucden Financial's Daria Efanova says in a note. Market attention is fixed on Wednesday's U.S. Consumer Price Index data, and Producer Price Index data set for release on Thursday. The economic data could provide more clues as to the Federal Reserve's pathway to monetary policy easing. Lower interest rates typically raise the appeal of non-interest bearing bullion. (joseph.hoppe@wsj.com)

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US Natural Gas Prices Exceed 2022 Highs

Trading Economics

US natural gas futures soared nearly 5% to $4.60 per million British thermal units (MMBtu), their highest level since December 2022, fueled by extreme weather, supply constraints, record LNG exports, and geopolitical tensions.

Bitter cold has driven up heating demand, while freezing temperatures have triggered "freeze-offs" and production disruptions.

Meteorologists forecast a shift in weather patterns, with the Lower 48 states transitioning from mostly warmer-than-normal conditions between March 6-15 to predominantly colder-than-normal temperatures from March 16-21.

Also, LNG exports surged to an all-time high of 15.6 bcfd last month while trade uncertainties, including a potential slowdown in Canadian gas exports to the US, add to supply concerns, making it more difficult to replenish storage levels.

Despite these pressures, gas production in the Lower 48 states has risen to an average of 105.8 bcfd so far in March, up from a record 105.1 bcfd in February.

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Gold rates in India: Check how much 22K, 24K gold costs in your city today

Moneycontrol

Gold was inched up to Rs 87,820 for 10 gms on March 10 following global cues amid a weaker dollar and concerns for global trade following US President Donald Trump's tariff war.

The average price of 10 grams of 22 karat gold was at Rs 80,500. Silver, however, was marginally lower at Rs 99,000 a kg.

Let's check the latest prices of 22 carat and 24 carat gold in 10 big cities of the country:

CityPrice of 22K gold per 10 gram

Price of 24K gold per 10 gramDelhiRs 80,650

Rs 87,970MumbaiRs 80,500

Rs 87,820ChennaiRs 80,500

Rs 87,820KolkataRs 80,500

Rs 87,820BengaluruRs 80,500

Rs 87,820JaipurRs 80,650

Rs 87,970LucknowRs 80,650

Rs 87,970HyderabadRs 80,500

Rs 87,820AhmedabadRs 80,550

Rs 87,870

(as per data on Good Returns)

While 24-carat is a 100 percent pure gold with no trace of any other metal, the 22-carat variant has 91.67 percent yellow metal with some traces of alloyed metals like silver or copper.

Recently, World Gold Council chief executive officer (CEO) David Tait said gold is an important asset class to have in a portfolio and even the central banking community sees it so.

"Gold is something that you hold for a lifetime" he said, while adding that every indicator points that gold prices will go up. While speaking at the Moneycontrol Global Wealth Summit 2025, Tait further said that there is an enormous opportunity, not just in India but also in China and Japan, which will help the gold ETF (exchange-traded fund) market to grow.Disclaimer: The views and investment tips expressed by investment experts on Moneycontrol.com are their own and not those of the website or its management. Moneycontrol.com advises users to check with certified experts before making any investment decisions

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Palm Oil Under Pressure to Trade Below MYR 4,600

Trading Economics

Malaysian palm oil futures tumbled around 1.5% to below MYR 4,600 per tonne, reversing three sessions of gains as traders booked profits following a two-week top last week.

Meanwhile, concerns over global trade tensions mounted after China planned to impose import tariffs on Canadian rapeseed oil and rapeseed meal.

Turning to monthly data from the Malaysian Palm Oil Board, February’s exports fell 16.27% from the prior month to a 4-year low of 1 million tons.

Further losses were capped by industry data showing stocks at the end of February shrank 4.31% to 1.51 million metric tons, the fifth monthly drop and the lowest level since April 2023.

Meanwhile production in February fell 4.16% to 1.19 million tons, the lowest in three years, as floods disrupted output.

Separately, a top official noted pest infestations in palm oil plantations across two Malaysian states.

In India, the largest palm oil buyer, early indications suggest that importers may increase buying in March to renew stocks.

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Copper Prices Fall for Second Session

Trading Economics

Copper futures dipped below $4.70 per pound on Monday, extending losses for a second straight session, as disappointing economic data from China dampened market sentiment.

Weekend data revealed that China’s consumer and producer prices declined in February, underscoring persistent deflationary pressures in the world's top copper consumer.

Despite policymakers in Beijing touting their policy toolkit to stimulate growth at a recent political meeting, China’s economic outlook remains uncertain, weighed down by weak domestic demand and an escalating trade war with the US. Last week, copper prices surged to multi-month highs after US President Donald Trump suggested imposing a 25% tariff on copper imports.

Such a move would increase reliance on domestic production, which remains constrained, as the US imports nearly half of its copper and operates only two major smelters.

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