We have seen some industrial commodities markets go from famine in late 2015 and early 2016 to feast in late 2016 and early 2017. However, over recent months the price of many of the staple raw materials necessary for building infrastructure around the world have moved back into famine mode, and price trends have turned bearish.

Commodities required for construction projects began to recover long before the election of Donald J. Trump as the forty-fifth President of the United States last November. However, the surprise election results vaulted many of these commodities to new highs, and they continued to rally into early 2017. The pledge of infrastructure rebuilding in the United States and the hope that fiscal stimulus in the world's richest nation would spark an economic rebound around the globe caused buying in stable raw material markets.

The price of iron ore rose to $90 per ton in February 2017, after trading below $40 in late 2015. Copper rallied from $1.9355 per pound in January 2016 to $2.84 thirteen months later. Lumber rallied from under $300 per 1,000 board feet to over $410, and crude oil which traded at $26.05 in February 2016 appreciated to over the $50 per barrel level. There are so many other examples of commodities markets in metals, minerals and the energy sectors that moved from famine to feast at the start of this year, but many of those prices have turned south once again over recent months.

Lumber finds a bottom one tick above technical support

Lumber is a construction staple and there lots of things going on in the timber market these days. The potential for a trade war with Canada has ignited volatility in the lumber market as fears of protectionist policies could cause shortages of wood at a time when new home building in the United States continues to grow. The low interest rate environment and prospects for fewer regulations which could expand the addressable market for new home buyers as banks ease lending standards led the price of lumber futures to the highest level since 2005 in April. However, the price has cascaded lower since those recent highs. The prospects for infrastructure rebuilding in the U.S. fueled gains in many industrial commodities and the lack of progress on those initiatives over the past few months has caused some degree of disappointment.