Traders Are Bidding Up Lumber With Exchange Limit Removed

(Bloomberg) -- Lumber roared to a fresh record high in Chicago, with traders bidding up prices in the nearby contract that no longer has an exchange-imposed limit.

The contract for May delivery is expiring soon enough that, according to exchange rules, prices can rise as high as market participants are willing to pay. It jumped nearly $100 to $1,600 per 1,000 board feet. By contrast, the most-active July contract rose by $42, the maximum allowed.

The surge is the latest sign of the stunning demand for wood that’s emerged as the U.S. economy picks up. It’s peak home-building season, and Americans, tired of being cooped up in cramped spaces during the pandemic, are seeking to purchase bigger homes. That’s clashing with a lumber supply chain that’s being dogged by everything from trucking delays to worker shortages.

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