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This idea was discussed in more depth with members of my private investing community, Hecht Commodity Report.
Lumber is an essential ingredient when it comes to construction. Lumber is one of many industrial commodities that reflect economic conditions, and the price of wood can be highly volatile. While many speculators trade other raw materials in liquid futures markets, lumber is another story.
While lumber is not a popular trading market in the world of futures, the price is a significant barometer for the strength of industrial commodities. Over recent years, the price action in the wood market has been signaling that economic growth is rising and the demand for raw materials and the building blocks of construction is booming.
Lumber has tripled since September 2015
While I never trade the lumber futures market, I watch the price action like a hawk for clues about how the overall economic conditions are impacting the demand for a key industrial commodity. The ascent of the price of lumber over the past two years and eight months has been nothing short of astounding.
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