A review of the financial performance of lumber futures and some prospects

Nan Zhang, Bin Mei and Yanshu Li

Forest Policy and Economics, 2023, vol. 157, issue C

Abstract: We aim to examine the financial performance of lumber futures by conducting a systematic review in the field. It begins with a historical overview of the evolution of lumber futures in the United States, followed by a synthesis of the methodologies employed in previous studies. Subsequently, we discuss price dynamics in the lumber futures market, correlation with timberland market values, information processing mechanisms, and other relevant topics. The review highlights the dominant role of lumber futures prices in price discovery. Price volatility can be explained by the theory of storage and time to delivery and is consistently associated with announcement effects. Moreover, timberland market values and timber REIT prices are positively related to lumber futures prices. The review also sheds light on the need for more nuanced examinations of price dynamics and connections of lumber futures with agricultural commodity futures.

Keywords: Commodity market; Information transmission; Price dynamics; Timberland investment (search for similar items in EconPapers)
Date: 2023
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Persistent link: https://EconPapers.repec.org/RePEc:eee:forpol:v:157:y:2023:i:c:s1389934123001909

DOI: 10.1016/j.forpol.2023.103095

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