CME lumber ends higher, trims $10-limit gains

CHICAGO Nov 23 (Reuters) - Chicago Mercantile Exchange lumber futures ended higher on Monday, but the market eased off session highs after rising by the $10 daily trading limit.

* Traders cited expectations for further strength in cash markets as wholesalers and retailers replenish stocks.

* "There's a little better business and low inventory," said Ashley Boeckholt, lumber analyst with Bloch trading. "I think we have seen the bleakest point in the lumber market and I think we are set up now in a bull configuration moving higher."

* "We're setting up for 2010 to probably have one giant absolute run, if not a bubble in softwood lumber," he said.

* Random Lengths on Friday reported cash spruce at $222 per tbf, up $2 from Wednesday and up $20 from a week ago.

* Higher outside markets and housing showing a slight but persistent improvement also lent early support.

* Sales of previously owned U.S. homes rose in October at a faster-than-expected pace to the highest in more than 2-1/2 years as buyers rushed to take advantage of a popular tax credit, National Association of Realtors said on Monday. [ID:nN23250199

* January lumber 2LBF0 closed up $4.10 per thousand board feet at $226.30 after trading up the $10.00 limit at $232.20 early. March 2LBH0 was up $4.30 at $250.30 per tbf.

* Some traders cited talk that China might buy more Canadian spruce as the country changes requirements for use of wood in construction.

* "They can use a lot more, from what I understand, of the spruce products coming out of Canada. They can use more of that in multistory buildings where they couldn't in the past," Boeckholt said.

* "There is already more exports (to China) since they changed their rating system," he added. (Reporting by Jerry Bieszk; Editing by David Gregorio) ((jerry.bieszk@thomsonreuters.com; 312-408-8725; Reuters Messaging: jerry.bieszk.reuters.com@reuters.net)) ((For help: Click "Contact Us" in your desk top, click here [HELP] or call 1-800-738-8377 for Reuters Products and 1-888-463-3383 for Thomson products; For client training: training.americas@thomsonreuters.com ; +1 646-223-5546))