Just like on a child's report card, letters of the alphabet are used as a grading system for plywood: A is best, B is not so bad, C is average and D is below average. The letter X, sometimes added to fir plywood, stands for exposure, meaning that the adhesives used in the manufacturing are water-resistant.
Grading by Letters
Plywood is graded per side, meaning that individual sides can be graded differently. The letters A, B, C and D typically refer to the veneer or face of the material. But defects in the core that you might not see, such as voids, pockets or putty along the edge are also included in the grading system.
Structural plywood is typically marked CD or CDX. It has one average side and one side below-average. The C side has visible defects such as football-shaped patches, knots and possibly voids. The D side will have a greater incidence of defects, patches and voids. CD plywood is ideal for interior, structural projects, such as cabinet jambs and utility shelving for garages or shops, where strength is needed without aesthetics.
The two varieties, CD and CDX, are interchangeable for interior uses. CDX plywood is capable of withstanding a limited amount of exposure to the elements. It can be used for exterior sheathing during the initial construction of a project, for floor underlay, as a base for roofing material or anywhere you would use exterior or interior plywood. Rain on CDX plywood is typically not an issue. Prolonged exposure to moisture will take a toll, however, and it's not recommended for permanent exposure to moisture.
Cost and Value
CDX plywood is priced slightly higher than CD plywood, but the prices remain comparable. If you're concerned about moisture, it's worth the slight difference in cost. Use CDX in place of CD plywood for rough shelving in a basement, garage, laundry room or anywhere high moisture content may be present.
Grading System Continues
Grading doesn't end with A, B and C, and more particularly when grading hardwood plywood. The grading system continues to descend with the letters D, E and shop-grade. Each descending grade has more defects, streaks and color variations than its predecessor. Shop grade, the most economical plywood available, has allowable defects of almost any type on both sides, and it is inconsistent in size and thickness. Shop grade is at least 85 percent usable. Defects can typically be trimmed out.