Among the few bucking the trend in the commodities space, livestock-related exchange traded notes are bouncing back as some traders pounce on an oversold area and short-covering helped maintain the momentum.
Since the November 10 low, the iPath Bloomberg Livestock Subindex Total Return ETN (NYSEArca: COW) surged 6.7%. COW was up 2.4% Thursday.
Meanwhile, on Thursday, CME live cattle futures gained 2.4% to $1.3445 per pound and CME lean hogs were up 1.2% to $0.5685 per pound.
COW includes a 61.7% tilt toward live cattle and 38.3% in lean hogs.
Cattle and hog prices experienced back-to-back selling for over a week after the Federal Open Market Committee meeting announcement and the better-than-expected October jobs report fueled speculation of a December rate hike. In the period between the FOMC announcement on October 28 through November 10, COW declined 13.9%.
“This whole break [lower]in cattle has been way too much selling, over the last couple days in particular,” Troy Vetterkind, owner of Vetterkind Cattle Brokerage, told the Wall Street Journal. “We’re still trying to find an equilibrium in cattle prices.”