Lumber Prices Have Crashed On Weak Outlook For Builders (WY, LUK, MAS, LPX, IP, FBR, TOL, KBH, LEN, PHM))

On May 17th and May 25th, the Chicago Mercantile Exchange stopped trading in lumber futures because the contract price had fallen by the maximum allowable amount of $10. On the 25th, lumber was halted at a price of $225/thousand board feet, which is the price that the contract opened at again this morning. The July contract is trading now at $234. Since April 21st, the contract price is down more than $100. This price drop will have an impact on the four large US lumber companies, Weyerhauser Co. WY, Leucadia National Corp. LUK, Masco Corp. MAS, and Louisiana-Pacific Corp. LPX as well as paper makers International Paper Co. IP and Fibria Celulose S.A. FBR. Nor is this good news for the rest of the year for homebuilders such as Toll Brothers Inc. TOL, KB Home KBH, Lennar Corp. LEN, or PulteGroup Inc. PHM. Read the rest of this story on 24/7WallSt.