CHICAGO, Nov 28 (Reuters) - Chicago Mercantile Exchange cattle futures surged on Tuesday in a short-covering rebound from multi-month lows in the prior session, supported by the market's steep discount to cash market prices.
Feeder cattle futures rose by as much as the daily trading limit, triggering expanded limits for both feeders and live cattle for Wednesday's session.
Fund long liquidation on Monday had pushed prices of both commodities to fresh lows, including life-of-contract lows in nearly all months before Tuesday's rebound.
"We went too low in the futures market," said Don Roose, president of U.S. Commodities. "We overdid it to the downside, the cash market started to stabilize and the funds quit liquidating."
Some fed cattle at U.S. Plains feedlot markets traded at $175 per cwt this week, according to the U.S. Department of Agriculture (USDA), down $2 from last week but still a premium to December futures, which settled 2.875 cents higher at 171.650 cents per pound.
Actively traded February live cattle surged 4.000 cents to 172.825 cents per pound.
January feeder cattle soared by the daily 8.250-cent limit to end at 221.050 cents per pound.
Trading limits for live cattle will be expanded to 10 cents for Wednesday's session, while feeder cattle will trade with a limit of 12.250 cents per pound, the CME Group said.
CME lean hog futures also rallied on Tuesday, propelled by short covering and spillover support from sharply higher cattle.
A day after setting a contract low, February hogs gained 2.100 cents to settle at 69.025 cents per pound. (Reporting by Karl Plume; Editing by Shailesh Kuber)
