The tradition of painting pencils yellow began in the late 1800s. At that time the best graphite (pencil lead) came from China, and American pencil makers wanted to show that their pencils contained Chinese graphite. Since yellow is a color associated with royalty and respect in China, pencil makers began to paint their pencils yellow.
Most pencils are manufactured from incense cedar. This conifer grows in central Oregon and California.
Source: Treeman Column, Northwest Woodlands Magazine, Winter 2002