The long-awaited rally in the cattle pits on the Chicago Mercantile Exchange materialized Friday as prices charged ahead after a sluggish open.
“The cattle made new contract lows but then turned sharply higher,” said John Ginzel, an analyst with Drexel Burnham Lambert Inc. in Chicago.
“A reversal like that is a fairly strong technical signal of a possible change in market direction,” Ginzel said.
The rally spilled over into the frozen pork belly pit but lent little support to live hogs, which remain under pressure from weak cash bids, Ginzel said.
Cash bids for cattle are showing signs of turning around. “The feedyards are becoming more resistant to the low bids and that’s helped,” Ginzel said.
The cattle futures were also spurred by ideas that the market had been oversold in recent weeks, Ginzel added.
Soybeans were higher, corn was mostly higher and wheat was lower on the Chicago Board of Trade.
“The feature today was the soybean oil that touched limit up,” said Smith Barney analyst Walter Spilka.