CHICAGO, Nov 29 (Reuters) - Chicago Mercantile Exchange cattle futures rose for a second consecutive session on Wednesday on short covering and follow-through technical and bargain buying after the market plunged to multi-month lows to start the week.
Improving packer margins and futures' steep discount to cash cattle prices also supported the market following the fund-selling purge that slashed live cattle futures by nearly 4% and feeder cattle by more than 6% over two days.
"All the panic selling kind of ran its course," said Matt Wiegand, commodity broker for FuturesOne.
"We'll have to see how demand holds up and whether packers continue to recover margins. And we'll have to see, with corn near the lower end of the range, if that starts bringing more speculative buying back into feeders," he said.
Actively traded February live cattle gained 0.650 cent to settle at 173.475 cents per pound, while January feeder cattle added 1.150 cents to end at 222.200 cents per pound.
Slumping corn prices, which touched a near-three-year low early this week, kept a firm floor under feeder cattle futures.
More U.S. Plains feedlot cattle traded at $175 per cwt on Wednesday, according to the U.S. Department of Agriculture (USDA), down $2 from last week but still a premium to December live cattle futures, which settled 0.250 cent higher at 171.900 cents per pound.
Beef packer margins have been improving from recent steep losses. On Wednesday, the average margin was estimated at a negative $6.50 per head, compared with losses of $36.50 per head a week earlier.
CME lean hog futures firmed on Wednesday, mirroring gains in cattle, with February hogs adding 1.075 cents to settle at 70.100 cents per pound. (Reporting by Karl Plume; Editing by Shailesh Kuber)
