Lumber as Supply or Speculation

NYSE:LL   LL Flooring Holdings, Inc
Investors seem certain that inflation is here and more is coming. But should they be? Consider this chart comparing different forms of Lumber pricing including LBS futures , Timber ETFs, and stocks (HD and LL) that are retail outlets for lumber. Lumber's dramatic rise is being followed up by a dramatic fall. LL may be a leading indication for lumber prices and if it is, then this commodity as further to fall.

But does that fall represent supply coming back on line? or just simply a decreased in the commitment level of speculators. Either way, lumber looks like a good short right now. The important question here is whether lumber prices are signaling that inflation will soon slow. With the dollar on the rise, this seems plausible.


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