"There's some feeling this earthquake in Chile is having an effect on the amount of lumber available in North America," said Gerry Van Leeuwen, a vice president at International Wood Markets Group in Vancouver. "Coincidentally, China, Japan, Europe and even the Middle East are feeling some shortage of supply. So that's causing some upward pressure on prices."

Eoin Treacy's view Lumber prices peaked in 2004 and entered a grinding bear market, defined by an unbroken progression of lower rally highs until November 2009. The bursting of the housing market in the USA sapped demand and the mountain pine beetle infestation is damaging supply. (Also see Comment of the Day on December 24th 2008) However, the despair previously evident in the timber sector is giving way to a new bull market.

Lumber prices bottomed in January 2009 and have sustained a progression of lower highs since, breaking the 5-year downtrend late last year and currently consolidating below $300. The uptrend has been particularly consistent since September, with two equal sized reactions and a sustained move below $260 would now be needed to question potential for a successful reassertion of the medium-term uptrend. (Also see Comment of the day on February 8th).

The US listed Claymore/Clear Global Timber ETF and the UK listed iShares S&P500 Global Timber and Forestry ETFs are performing more or less in line with the underlying commodity. The UK listed Phaunos Timber Fund holds more than 40% in Treasuries and continues to underperform.

Rayonier pays a regular quarterly dividend and yields 4.44%. The share is also a leader in the sector and continues to trend steadily higher. It is currently testing the psychological $45 level but a sustained move below $40 would be required for this area to offer anything other than a temporary area of resistance.

Weyerhaeuser remains in a first step above its base but has sustained a progression of higher reaction lows for the last year and a sustained move below $38 would be required to question scope for further upside.

Plum Creek has a similar pattern to Weyerhaeuser but pays regular quarterly 42¢ dividends which translate into a 4.36% yield.

Potlatch Corp yields 5.78% and prices broke upwards from a first step above the base three weeks ago. It has sustained a progression of higher reaction lows since late 2008 and a sustained move below the mean, defined by the 200-day moving average, would be required to question the medium-term uptrend.

West Fraser's chart pattern is more akin to that of lumber and it recently moved to a position of outperformance. It found support near the mean in February and while somewhat overextended in the short-term, a downward dynamic would be required to check momentum beyond a brief pause. A sustained move below $31 would be required to question the medium-term uptrend.

Sino-Forest has sustained an impressive uptrend from the 2008 lows and retraced the majority of the bear market decline in the process. A sustained move below the mean, currently near C$17, would be required to question the consistency of the medium-term move.