EP 188: Low Inventories, Lower Expectations — What’s Holding Lumber Up?
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EP 188: Low Inventories, Lower Expectations — What’s Holding Lumber Up?
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The lumber market is sending mixed signals. Buyers are keeping inventories lean, mills are struggling to maintain profitability, and housing demand continues to disappoint. Yet lumber is still moving, and certain products are commanding surprising premiums.
This week on The Lumber Word, Ashley, Gregg, and Charles welcome back Mike Logelin of Gulf Coast Shelter for an unfiltered discussion of the North American lumber market heading into the final months of 2026.
From Southern Yellow Pine versus SPF pricing and mill breakevens to weak housing starts, construction labor shortages, and the challenge of making money while holding inventory, the group digs into what buyers, sellers, and traders are experiencing firsthand.
They also debate CME lumber futures, contango, delivery economics, the lack of liquidity in Southern Pine futures, and whether regional basis risk makes effective hedging harder than it should be. As Gregg puts it: “The only positive that I can find right now is how negative everyone is.”
Is extreme pessimism a sign of a turning point—or is there more pain ahead? Tune in for market insight, honest disagreement, and a few laughs.
Timeline
00:00 Introduction and Mike Logelin returns
01:10 Southern Yellow Pine market conditions
03:20 Mill costs, breakevens, and production curtailments
05:25 Housing starts, permits, and completions
06:00 Construction labor shortages and builder slowdowns
09:45 Panelization, technology, and housing affordability
14:55 SPF pricing and buyer’s remorse
18:40 Southern Pine replacing SPF in certain markets
20:10 Lumber futures, cash pricing, and delivery economics
22:20 Lumber production and demand trends
26:20 Contango, backwardation, and the CME contract
29:20 Hedging when margins disappear
32:25 Market liquidity and distributor profitability
34:25 EFP opportunities and Southern Pine futures
38:00 Regional basis and Southern Pine futures liquidity
41:50 Bearish sentiment and the lumber market outlook
43:40 European lumber imports and freight concerns
45:15 Closing remarks