Can an Understanding of the Global Commodity Market and International Trends Assist us in Timing our Harvesting Better?
From time to time, when clients are searching for the elusive answer to what is the best time to harvest, we get into some pretty detailed discussions about global trade, commodities and economic cycles. For those of you interested in such matters, we are going to venture (briefly) into this esoteric world and see what wisdom we glean to make us better decision-makers. Let’s look at how closely timber prices (represented by US D fir log exports) are correlated to the price of another widely traded global commodity – metals. The first thing we note is a lack of correlation between metal prices and D fir log export prices – see chart below. • From July 1988 to July 2000, there are predominantly strong negative correlations. • From August 2000 to August 2005, there are predominantly positive correlations. • Very mixed correlations from August 2005 to July 2009, and high volatility. The negative correlations shown above are also exhibited in the value of timberland. Timberland assets are s
