Replies to post #2158 on The Rising Influence of Rising Affluence

[DewDiligence]

China’s importation of wood is a pretty big story for natural-resources investors—please see #msg-59643478, #msg-59470485, and #msg-56227280 for additional color.

Curiously, PCL’s CEO, Rick Holley, said on the 4Q10 CC that much of the wood China is importing is stuff from BC that was badly damaged by the mountain pine beetle (#msg-47898395). It sounds like this is a “Don’t ask, don’t tell” kind of situation :- )

p.s. PCL is one of my top-5 LTBH picks in the entire stock market (#msg-59870109).

[DewDiligence]

(PCL)—Barron’s blurb on lumber prices:

http://online.barrons.com/article/SB50001424053111904582604576432110263390204.html

…investors should expect prices of [lumber] to yo-yo over the next several years. The rapid and huge growth of Chinese demand and the advent of commodity index funds have disrupted the seasonal trends in lumber prices that have persisted for decades.

In many ways, what's happening in the lumber market is a microcosm for the entire commodities asset class. But the factors behind these secular changes are felt much more acutely in lumber than, say, crude oil, because the market itself is so small. Total open interest across all lumber was at 8,801 contracts late last week. This compares with more than 1.5 million contracts in oil and almost 1.2 million in corn.