The production of lumber has been a critical economic activity throughout American history. The lumber
industry consists of three divisions: the logging industry, the sawmill industry, and the panel industry. Approximately one-fifth
of all U.S. land grows potentially commercial timber, of which about 70 percent is privately owned. Most U.S. lumber production
supplies domestic markets, particularly single-family homes.
For more than
30 years the CME® Random Length Lumber futures and options have given hedgers and speculators a vehicle
to manage price risk and to take advantage of price opportunities. The contract specifies 110,000 board feet (one 73’
flat car) of random length 8’ – 20’ softwood 2 x 4s, the type used for rehabbing and construction.