CME lumber surge 4.5 pct, end limit up as funds buy

(Updates with closing prices, contract highs)

CHICAGO, Nov 16 (Reuters) - Chicago Mercantile Exchange lumber futures surged 4.5 percent to its daily limit of $10 per thousand board feet amid fund buying sparked by a breakout on the charts, traders said.

"After Thursday's action, we saw some technical breakouts and we gained momentum today," said Brian Leonard, lumber analyst with Rosenthal Collins. "That's why you are getting the funds in there because they are buying the breakout."

Short-covering also developed on reports that mill asking prices were raised to $212, up from Friday's official quote of $202 per tbf.

"People like to sell lumber because they think it's too high and then they blow out," Leonard added.

* January lumber 2LBF0 was at the $10 per tbf limit at $229.50 and March 2LBH0 was limit up at $248.90. May 2LBK0 and July 2LBN0 were also bid limit up with May, July and November 2LBX0 posting contract highs.

There were 280 unfilled buy orders at limit up in January at the close, 10 in March, 20 May and 10 in July.

* Random Lengths on Friday reported cash spruce at $202 per tbf, up $8 from Wednesday and up $10 from a week ago. But floor sources reported mill asking prices now at $212 or higher.

* "Buyers who had been comfortable on the sidelines in previous weeks were forced to step back into the market," Random Lengths said in Friday's weekly report.

* "Some traders noted that their customers had underestimated their needs, while others boosted inventories on expectations of tightening supplies. A smattering of new curtailments were announced, and the perception that extensive additional downtime would be announced before year-end was widespread," they said.

* "In some cases, producers were able to push order files further out than they have in some time. As shipment times were extended, quotes were pushed up more aggressively," the reporting agency added. (Reporting by Jerry Bieszk; Editing by Marguerita Choy)