Cold winter conditions put a freeze on the lumber industry, with prices at near seven-month lows, but timber exchange traded funds could make the cut during the spring thaw.

“Last year everyone was irrationally exuberant about the spring and about how fast the housing recovery would take hold,” Steven Chercover, an analyst with D.A. Davidson, said in a Wall Street Journal article. “This year, we were optimistic, but had the worst winter in decades” in some areas of the Midwest and East Coast.

The heavy snow impeded transportation and construction. Even with the snow thawing out, a lot of lumber has been left sitting in mills and warehouses due to a large backlog.

“Whenever the perception is out there that there’s lumber piled up like there is now, the psychology feeds into a real bearish market,” Paul Harder, a lumber trader with Dakeryn Industries, said in the article.

CME lumber futures fell as low as $323.5 per 1,000 board feet last week, the lowest since September. Lumber prices, though, gained Monday, trading around $331.5.

Nevertheless, some analysts remain confident that the lumber market will recover. Daryl Swetlishoff, head of research at Raymond James, points to an end to a Canadian trucker strike, which could free up transportation of lumber, and expects North America to take in the stockpiles. [Two ETFs for Rising Lumber Prices]

Showing Page 1 of 2