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TFC Commodity Trading Forum

Learn About Futures Insider for December : Plumber *LINK* *PIC*

Contract Size: 110,000 board feet (˜260 cubic meters)

Price Quote & Tick Size: US Dollars per 1,000 board feet (mbf); minimum tick size is $.10 per mbf ($11 per contract)

Contract Months: Jan, Mar, May, Jul, Sep, Nov

Trading Specs: Open outcry trading is conducted MON-FRI: 9:00 a.m. -1:05 p.m. CT. Electronic trading is conducted via the CME Globex® trading platform MON - THU 5:00pm - 4:00pm CT (next day); SUN and holidays 5:00pm - 4:00pm CT (next day)

Daily Price Limit: $10 per mbf above or below previous day's settlement price; expandable to $15 per mbf

Trading Symbols: LB
Lumber Facts
The production of lumber has a rich history in North America and critical economic importance. As the United States grew westward, so did the timber industry and by the twentieth century, New England’s white pine, the Western redwood, pine, and fir forests, and the South’s pine forests had become important sources of national lumber.

The following map shows the softwood lumber resources across Canada and the United States:
Concerns over sustainability of lumber resources were brought to industry attention as early as the 1870s and eventually gave rise to professional forestry and the national forest system. Tree nurseries and reforestation efforts are now important parts of the industry.
According to the CME rule book, deliverable types of lumber are nominal lengths of 2x4’s manufactured in the western United States or from British Columbia or Alberta in Canada. A variety of rules exist regarding the specifics of origin and the type of wood allowed. Coniferous species like pine, fir, and spruce provide the bulk of softwood used for lumber as well as cedar and hemlock.

Manufacturers remove much of the moisture content from the green lumber, usually surfaced dry to 20% moisture content. Accepted grades No. 1 and No.2 must also be packaged by banding together and wrapping in poly or paper.

The US Census Bureau’s 2007 annual industry report shows production by state as illustrated in the following table: