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Macro Pulse highlights recent activity and events expected to affect the U.S. economy over the next 24 months. While the review is of the entire U.S. economy its particular focus is on developments affecting the Forest Products industry. Everyone with a stake in any level of the sector can benefit from
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Saturday, July 9, 2016

May 2016 International Trade (Softwood Lumber)

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Softwood lumber exports increased (+4 MMBF or 2.9%) in May while imports jumped more noticeably (+154 MMBF or 10.6%). Exports were 9 MMBF (6.5%) below year-earlier levels; imports were 515 MMBF (47.1%) higher. As a result, the year-over-year (YoY) net export deficit was 524 MMBF (55.1%) larger. The average net export deficit for the 12 months ending May 2016 was 28.5% higher than the average of the same months a year earlier (the “YoY MA(12) % Chng” series shown in the graph above). 
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North America was the primary destination for U.S. softwood lumber exports in May (44.5%, of which Canada: 22.4%; Mexico: 22.1%). Asia (especially China: 15.6%) placed a close second, with 32.5%. Year-to-date (YTD) exports to China were up 10.6% relative to the same months in 2015. Meanwhile, Canada was the source of nearly all (90.6%) softwood lumber imports into the United States. Interestingly, France has rocketed to the #2 spot YTD, from #26 in 2015. Overall, YTD exports were down 1.5% compared to 2015, while imports were up 42.1%. 
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U.S. softwood lumber export activity through West Coast customs districts represented the largest proportion in May (37.1% of the U.S. total), although the Gulf and Eastern districts were not far behind (27.7% and 27.0%, respectively); Seattle maintained its dominance as the most active export district (22.9% of the U.S. total). At the same time, Great Lakes customs districts handled 66.2% of the softwood lumber imports -- most notably Duluth, MN (25.1%) -- coming into the United States. 
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Southern yellow pine comprised 29.5% of all softwood lumber exports in May, followed by Douglas-fir with 12.6%. Southern pine exports were up 4.5% YTD relative to 2015, while Doug-fir exports were down 14.4%.
The foregoing comments represent the general economic views and analysis of Delphi Advisors, and are provided solely for the purpose of information, instruction and discourse. They do not constitute a solicitation or recommendation regarding any investment.

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