US existing home sales fell 1.7% month-over-month in July, reaching a seasonally adjusted annual rate of 4.06 million units, falling short of economists' expectations. However, commodity traders appeared to have anticipated this weakness.

The Random Lengths Framing Lumber Composite Index, which measures spot market sales, hit a four-year high at the end of last month due to sawmill closures and reduced imports. Around the same time, traders began aggressively selling lumber futures, betting that higher mortgage rates would curb home sales, reduce renovation demand, and ultimately drag down lumber consumption.

Over about two weeks starting from late July, lumber futures for September delivery fell more than 12%. Although prices have rebounded slightly in recent trading sessions, analysts believe that with the summer home-selling season coming to an end, lumber prices have likely peaked for the year.