CME Group has partnered with Fastmarkets, a leading cross-commodity price-reporting agency, to introduce a new cash-settled Southern Yellow Pine futures contract. Set to begin trading on March 31, 2025, pending regulatory approval, the contract is designed to support the fast-growing Southern Yellow Pine lumber industry in North America. The contract will be settled based on Fastmarkets’ trusted Random Lengths Southern Yellow Pine #2&Btr 2×4 (eastside) daily price, a key industry benchmark.
Unlike traditional futures contracts that rely on physical delivery, this new contract will be settled based on the price difference between the contract price and the market price at expiration. The decision to create a Southern Yellow Pine futures contract comes at a time when the demand for this lumber species is rising, driven by the growth of the U.S. lumber industry and the challenges of trade restrictions, such as tariffs on Canadian lumber.
“Demand for Southern Yellow Pine has surged as North American lumber production has shifted southeast, creating new hedging needs for the industry,” said John Ricci, managing director and global head of agriculture products at CME Group. “This new Fastmarkets-settled Southern Yellow Pine futures contract complements our SPF futures and helps industry participants better manage their price exposure.”
Southern Yellow Pine accounts for over 36% of North America’s softwood lumber production, and its growing role in the residential and remodeling sectors makes this futures contract a timely addition. The new contract provides key benefits, including:
Tailored hedging capabilities for the expanding Southern Yellow Pine lumber category.
Greater accuracy and confidence with Fastmarkets’ IOSCO-compliant price assessments.
A solution for addressing changes in U.S. domestic supply amid trade uncertainties and declining sawlog availability.
Przemek Koralewski, Fastmarkets’ global head of market development, expressed pride in partnering with CME Group: “This contract is a vital resource for risk management at a crucial time for the lumber industry.”
The Southern Yellow Pine futures contract is expected to serve a wide range of industry professionals, including loggers, mills, wholesalers, retailers, traders, and home builders. With Fastmarkets’ reliable data and CME Group’s market innovation, this new contract aims to help participants navigate risks and seize growth opportunities in North America’s rapidly expanding lumber sector.
