Background: Resin pockets and blemishes in pruned logs of radiata pine (Pinus radiata D.Don) can reduce the value of clear and moulding grades of lumber. External resin features (ERF) on the bark of the logs have proved an effective method of predicting the incidence of resin pockets in the lumber. Resin canals have been associated with resin blemishes in radiata pine, and could prove useful in improving the prediction of the grade recovery of lumber. Methods: Pruned butt logs of radiata pine trees from two forests in the North Island, New Zealand, were selected for low, moderate, and severe levels of external resin features (ERF) on the bark, and for low, average, and high resin canal diameter, frequency and brightness from breast height increment cores. The relationships were evaluated between these properties, and the lumber resin features and grade recovery of the logs. Results: The number of resin pockets, the blemish rating, and the percentage of boards with resin streaks and resinous heartwood increased, and the recovery of clears and moulding grade boards and the lumber value declined, with the severity of the ERF class of the logs. Multiple regression models gave good predictions of the grade recovery and loss of lumber value, using the log ERF class, volume, heartwood content, and number of Type 1 resin pockets on the ends of the logs, as independent variables. The resin canal properties did not improve the regression models. Resin blemishes were associated with Type 2 resin pockets, and were more frequent in the forest where false growth rings were present. This suggests the constitutive resin flow from resin canals, rather than the resin canal size and frequency, is more important in determining the incidence of resin blemishes. Conclusions: The prediction of the grade recovery of lumber using the ERFs of radiata pine logs, was supplemented by the log volume, heartwood content and number of Type 1 resin pockets on the ends of the logs. The environmental factors that drive the constitutive resin enrichment of resin canals, such as drought conditions that give rise to false growth rings, could be useful in improving the prediction of grade recovery for forest stands.