* Lumber futures locked limit up
* Rise on speculative buying after Sandy
* Expectations for demand to rise
CHICAGO, Oct 31 (Reuters) – U.S. lumber futures soared on
Wednesday on expectations for demand to increase in the
aftermath of monster storm Sandy that caused massive flooding in
the northeastern United States, damaging numerous homes that
would need rebuilding.
The storm, which made landfall on Monday evening and has
killed at least 45 people, may cause up to $15 billion in
insured losses, according to one disaster-modeling company.
“Historically, this is what happens after a natural
disaster,” said Michael Young, president of Pacific Futures
Trading in Seattle, Washington.
Chicago Mercantile Exchange November, January
and March lumber futures rose by the daily trading limit
of $10 per thousand board feet and remained locked at those
levels, effectively shutting down trading.
Benchmark January futures were $10 higher at $331.20 per tbf
at 8:51 a.m. CDT (1351 GMT).
Traders said speculators were behind much of the buying in
lumber futures as they anticipated demand to increase when
people affected by Sandy begin to rebuild or repair their homes.
“There is anticipation of a big rush in demand after this
storm,” said a trader, who declined to be named.
The type of lumber traded at the CME is so-called framing
lumber that is primarily used in home building.
The optimism over demand for lumber and other home-building
materials was also reflected in Home Depot, the world’s
largest home improvement retailer, whose shares rose 3.2 percent
to $61.98 by 9:00 a.m. CDT (1400 GMT).
