North American softwood (NLGA)

The NLGA (National Lumber Grades Authority) rules define the quality and dimensions of lumber for export.
  Knots Shakes Wane Other imperfections
CLEAR 2 or B CLEAR 4 non-grouped sound knots are tolerated on counter-face and counter-edge Permitted shake length : 1/2 of the piece's width Not permitted Slight drying checks (cracks) - discoloration of heart wood, stain, twisted grain and gum pockets not permitted - Slight sapwood is permitted on 1/4 of the surface
CLEAR 3 or C CLEAR 4 sound knots are tolerated on face and edge. A little more on counter-face and counter-edge Permitted shake length : the piece's width Not permitted Slight drying checks (cracks) - discoloration of heart wood, stain, twisted grain and gum pockets not permitted - Slight sapwood altered
CLEAR 4 or D CLEAR Not ruled Permitted shake length : the piece's width Permitted wane length : the piece's width Medium discoloration of the heart wood - stains on 10 % of the face and 25 % of the counter-face - 5 gum pockets are permitted - twisted grain permitted

Grade Merchantable
SELECT Merchantable For quality structure works, requiring sound, resistant wood of good appearance
No1 Merchantable For construction, when resistance prevails over appearance
No2 Merchantable For common construction but without offcuts
No3 Common For secondary applications such and packaging and pallets

Grade Structural (mechanical classification)
Light Framing Light mechanical perfomances needed
Select Structural For construction, when resistance prevails over appearance

Grade Factory
Factory Flitch For all applications in carpentry and manufacturing of doors, windows, , furniture and small structures. Yields at least 80 % in volume of wood exempt of defects
Shop Flitch For similar applications as Factory Flitch. Yields at least 60 % in volume of wood exempt of defects
Shop For sub-products of various widths and shorter lengths

Reference:
 
National Lumber Grades Authority (NLGA - http://www.nlga.org/)