Cattle Futures - Cattle Rallies On Oversold Ideas, Corn

US - The Chicago Mercantile Exchange live and feeder cattle futures closed higher Monday on Chicago Board of Trade corn's retreat, short covering and sentiments that recent selling was overdone.
calendar icon 24 April 2007
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Meanwhile, CME lean hogs settled lower and pork bellies down sharply.

Live cattle futures stumbled out of the gate on carryover selling, Friday's boxed-beef cutout declines and last week's cash price setback. Also, cattle market bulls were initial reluctant buyers after Friday's monthly cattle-on-feed report sported a lower-than-expected marketings figure.

Nonetheless, April and June live cattle's oversold Relative Strength Index conditions and the start of CBOT feedgrains' demise generated cattle buying interest on breaks. Short covering and buy stops beneath the market were springboards for subsequent live cattle advances.

Purchasing by funds surfaced after the April and June contracts held above 100-day moving average support levels, and spot April filled Friday's chart gap with the help of April/June bull spreading. June also garnered additional backing amid periodic April/June bear, and June/August and June/October bull spreading.

Bullish cattle traders were further motivated by perceived stability from midday choice and select boxed-beef quotes that were up $0.79 and $0.14, respectively.

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