I asked what the prospects were for lumber prices in a July 30, 2026, Barchart article, where I concluded with the following:
In July 2026, seasonality and elevated interest rates could weigh on lumber prices and WY, WOOD, and CUT shares over the coming weeks and months. However, lumber’s price consolidation around the $600 per 1,000 board feet level could be healthy for the 2027 construction season if rates begin to decline and construction demand increases. The wildfires in Canada are another factor that could create future supply concerns and price volatility, given the destruction and the U.S. administration’s threat of tariffs and sanctions on Canada’s government.
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Nearby physical lumber futures were trading at $642.50 per 1,000 board feet on July 28, and the price plunged in August and the first half of September.
While Weyerhaeuser (WY) shares moved lower with lumber, the WOOD and CUT ETFs were only slightly lower.
Lumber plunges. Seasonal weakness and elevated interest rates.
In late July 2026, nearby lumber futures were trading at the 2026 high when they ran out of upside momentum.
The daily chart shows that the continuous CME physical lumber futures contract closed 2025 at $576 and rose 15.3% to a 2026 high of $664 per 1,000 board feet on July 23. Lumber prices plunged in late July and throughout August and into September, falling 18.5% from the July high to the September 18 low of $541 per 1,000 board feet. Lumber fell to a new low for 2026 in mid-September, and the trend remains bearish on September 18.
Elevated interest rates that slow mortgage and new home demand have weighed on lumber prices. Trade issues between the U.S. and Canada have also distorted prices. At the same time, the end-of-summer seasonality ushers in fall and winter, when construction projects decline due to weather issues.
The Fed increased the Fed Funds Rate by 25 basis points on September 18 to a midpoint of 3.875%. The long bond futures fell below their critical technical support at the October 2023 low of 107-04 and declined to the lowest level since 2007. Rising interest rates reduce mortgage and new home demand, weighing on lumber at a time when seasonality favors fewer construction projects.
Weakness in WY shares
Weyerhaeuser Company (WY) operates as a REIT, or real estate investment trust, owning and leasing timberlands in the U.S. and Canada. The trade war between the U.S. and Canada is likely weighing on WY shares in September 2026.
The year-to-date chart shows that WY shares closed 2025 at $23.69, rose 17.1% to a 2026 high of $27.75 on February 12, and fell 23.2% to a 2026 low of $21.30 on September 18. WY has been in a bearish trend since August 6 and was at the bottom end of its trading range and below its 2025 closing price on September 18. Technical support is nearby at the November 2025 low of $21.16 per share.
WOOD and CUT are steady
The iShares Global Timber & Forestry ETF (WOOD) has exposure to WY and other leading international timber and forestry companies.
The year-to-date chart shows that WOOD shares closed 2025 at $72.01, rose 15.7% to a 2026 high of $83.32 on February 12, and fell 22.6% to a 2026 low of $64.53 on May 19. WOOD has recovered since May 19, and at $70.55 on September 18, WOOD is only 2% below the 2025 closing price.
The Invesco MSCI Global Timber ETF (CUT) also has exposure to WY and other leading international timber and forestry companies.
The year-to-date chart shows that CUT shares closed 2025 at $29.06, rose 13.4% to a 2026 high of $32.95 on February 12, and fell 20.2% to a 2026 low of $26.30 on May 20. CUT has recovered since May 20 and, at $29.32 on September 18, is slightly above the 2025 closing price.
Seasonality means lumber may slumber until 2027
Lumber and lumber-related stocks and ETFs have struggled in 2026. After rallies failed, prices have declined toward the end of 2025 levels. Lumber tends to reach annual lows during winter as construction demand declines because of weather conditions. Meanwhile, stubbornly high interest rates have reduced demand for new home construction as markets enter the final third of 2026. Unprecedentedly high debt levels at over $40 trillion and rising, geopolitical turbulence and uncertainty, and the upcoming U.S. midterm elections will likely keep upward pressure on interest rates, with higher rates and seasonality continuing to weigh on lumber prices and related lumber assets.
Therefore, lumber may hibernate, slumber, and have to wait until the snow melts in 2027 before a positive tone returns to the market.
Buying lumber-related assets on weakness could be optimal
Markets are cyclical, and lumber is no exception. Nearby lumber futures prices are currently around $542.50. In 2021, they rose to a record high of $1,711.20 and in 2022 a lower high of $1,477.40 per 1,000 board feet. At one-third the price, lumber’s downside price potential could be limited. If interest rates stabilize or move lower over the coming months and years, inflation recedes, and new home demand increases, lumber, WY, WOOD, and CUT could soar.
I favor a scale-down accumulation approach to lumber-related assets over the coming weeks and months, leaving plenty of room to add on further declines. I would avoid lumber futures, as they remain highly illiquid with low open interest and daily volume. I would accumulate WY, WOOD, and/or CUT shares on a scale-down basis to position for higher lumber demand over the coming years.
Interest rates and seasonality are pushing lumber and lumber-related assets lower in September 2026, which could be an opportunity for 2027 and beyond.
On the date of publication, Andrew Hecht did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
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