I think you're describing beading or reeding:

http://www.axminster.co.uk/category-...ers-207674.htm

However you will be limited to the height of the cutter for the width
of your timber (or twice that if you can do a pass from the other
side).

I'd think you'd really want a router table to get a consistent finish.

Alternatively you could make up a jig and cut each reed individually,
if you're willing to put that much time into producing a moulding.

You did mention garden timber, so I guess this may be beyond the
capacity of a router. This would normally be done (in a professional
workshop) with a spindle moulder:

http://www.axminster.co.uk/product-C...-552-20834.htm