Lumber is a highly illiquid futures market, making trading, investing, and hedging challenging. The lack of volume and open interest causes offers to sell to disappear during rallies and bids to buy to evaporate when the price declines, exacerbating price variance. Therefore, the lumber futures market is best utilized as a benchmark for market participants to keep track of price trends. Lumber has a habit of leading the commodity sector as the price tends to decline before other more liquid raw material futures markets. A bottom in lumber often leads to lows in other commodities. ...
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