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Lumber in midst of big Q4 surge, replicating seasonal trend


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Lumber resurgence playing out, with seasonal patterns highlighting typical strong Q4 rally.

BG_LUMBER_361640647.jpgSource: Bloomberg
 Joshua Mahony | Senior Market Analyst, London | Publication date: Thursday 09 December 2021

Lumber trade up in the green

Lumber has been on a big ramp-up over the past month, building on the gains seen since the bottom in August.

We have written a number of pieces in recent months signalling the potential for just such a move to come to fruition. The long-term uptrend seen over the course of the past decade always pointed in the direction of another year-end surge.

That appears to be well underway, with prices hitting a six-month high today.

LB-Monthly-2021_12_09-15h01.pngSource: ProRealTime

Seasonality shows pattern of year-end strength

From a seasonality perspective, we could see a strong chance of a fourth quarter (Q4) resurgence, with the collapse in quarter two and three (Q2-Q3) bringing that same setup for a year-end push higher.

Lumber_seasonality_91221.png

 

On the daily chart, this recent drive higher can be put into some context, with price pushing higher once again after Tuesday’s volatility.

With that in mind, further short-term upside looks likely as we extend this lumber rally. A break below the $884 swing-low would be required to signal an impending retracement period.

LB-4-hours-2021_12_09-15h01.pngSource: ProRealTime
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