There may be "changes in how much lumber Canadian sawmills could send into the U.S. if the U.S. delegation is successful in restricting or adding some kind of tax," Ekstrom said.

A U.S.-Canada pricing agreement may take a "long, long, long time," he said. "The British Columbia government is effectively funneling back hundreds of millions of dollars in collected export fees to BC producers," the U.S. Coalition for Fair Lumber Imports said in a statement dated Oct. 8. This "has caused serious harm to the entire North American industry," it said.

If the dispute isn't resolved in 40 days, either party may refer the matter to arbitration, according to the U.S. Trade Representative.

Eoin Treacy's view Lumber found support in the region of $180 in June following a sharp pull back. It ranged between $200 and $220 until September and mostly between $220 and $240 until yesterday. It broke above $250 today and if the last few months are any guide we might expect the next consolidation to have an amplitude of between $20 and $30. A break of the three-month progression of higher reaction lows would be required to check scope for further upside. (Also see Comment of the Day on July 14th for a review of relevant shares).

West Fraser Timber has been ranging above the 200-day MA since August and needs to hold above C$35 to maintain the medium-term bullish outlook. Weyerhaeuser has a relatively similar pattern while Plum Creek Timber appears to be rallying from the lower side of its five-month range. Sino-Forest did not have as deep a decline as those listed above and rallied from the region of the 200-day MA last week.

Rayonier remains the sector's best performer having sustained a progression of higher reaction lows since March 2009. It has lost momentum and ranged mostly below $50 since April. It needs to sustain a move above the level to reassert the medium-term uptrend.

Potlatch has been ranging mostly above $33 since May and is rallying from that area at present. Provided it holds above $33, the benefit of the doubt can probably be given to prospects for continued higher to lateral ranging.

The iShares S&P Global Timber & Forestry ETF, the Claymore/Clear Global Timber Index ETF, the Phaunos Timber Fund and the Cambium Global Timberland Limited are all either testing the upper sides of their ranges or rallying towards them. Downward dynamics would be required to question near-term potential for successful upward breaks.