Remember the boom in lumber prices? The bubble burst this summer. Prices are down over 70% from the peak. Now producers are reporting inventory surpluses. This was a classic bubble.
https://tradingeconomics.com/commodity/lumberA number of other commodities blew up in price during the first half of 2021 and then started turning down in the past month or two as supply chain bottlenecks are being resolved: oil, natural gas, iron ore, copper, wheat, soybeans, etc. The outlier in this trend has been coal. In the span of 13 months, coal has gone from near its 10-year low (~$49) to a 10-year high that is well beyond prices we've seen before ($172.30). This could be the next lumber.
https://tradingeconomics.com/commodity/coalI missed the lumber bubble due to not paying attention, but I'm tempted to *responsibly* speculate against the price of coal, which has risen 250% in 13 months and has a very bubbly looking chart amid an overall cooling in other commodities. Yet I'm not sure I want to use futures due to the infinite downside potential. Have any of you tried commodity options? I'm looking at a small enough bet to be justified on the basis of education.
