CHICAGO (Dow Jones)--Profit-taking following Friday's cash-induced Chicago Mercantile exchange live cattle rally pressured futures Monday.

Live cattle rose initially, fueled by carryover from Friday's market gains that carried spot-April to a new contract high that was also its highest level in 18 months.

Bullish players were, at first, drawn to front-end cattle contracts that were underpriced, based on last week's cash sales.

Cash-basis cattle a week ago brought mainly $100 to $102 per hundredweight, compared with generally $96 the previous week. Processors haven't responded to current $102 asking prices from fed cattle sellers.

Nonetheless, skittishness about how this week's cash trade would play out, given inconsistent wholesale beef sales and slowly eroding beef packer profit margins, spawned selling into futures' upticks.

As spot-April and most-actively traded June retreated, they tripped sell orders that existed below the market. Spreading out of June into August weighed heaviest on June that was already underpriced compared with April.

Spreads involve the simultaneous trade of two or more months with the intent to capitalize on the price differences between them.

April was also a victim of its 77% Relative Strength Index reading. Any contract with an RSI of more than 70% means that month has become somewhat overbought and ripe for a selloff.

Nearby-April ended down 0.65 cent a pound, or 0.7%, at 99.00 cents. Most-actively traded June closed down 0.70 cent, or 0.7%, at 94.05 cents.

Profit-taking and live cattle selling pulled down CME feeder cattle as well. Futures were overvalued, based on the exchange's feeder cattle index, which discouraged would-be buyers.

In addition, spreaders sold May and bought April.

Nearby-April feeders ended down 0.50 cent, or 0.4%, at 114.02 cents. Most-actively traded May closed down 0.32 cent, or 0.3%, at 115.05 cents.


Pork Complex

Except for spot-April CME hogs that was underpinned by pre-expiration ideas, other months succumbed to their bearish price premiums to the exchange's hog index. Additionally, spreaders sold June and bought April and December.

Lean hogs began the morning on the plus-side of the ledger, briefly, in response to ongoing wholesale pork price gains and areas of higher cash hog quotes.

While spot-April held above Friday's lows, June and July quickly faded when bullish traders gravitated toward the sidelines. That caused both months to drift beneath the prior session's bottoms and trip orders to sell in the process.

"Nobody knew what to do or when to do it," a long-time CME hog trader said. "Seems to me that people just want to see what will happen to June and July after April expires."

Nearby-April hogs closed up 0.15 cent a pound, or 0.2%, at 76.37 cents. Most-actively traded June ended down 0.40 cent, or 0.5%, at 83.97 cents. July finished down 0.50 cent, or 0.6%, at 84.07 cents.

Pork bellies fell hard on spillover lean hog selling. In addition, pre-placed sell orders were tripped after May and July fell through their 20-day moving-average support floors.

May bellies ended 2.62 cents lower, or 2.7%, at 93.65 cents. July ended 2.50 cents lower, or 2.5%, at 96.00 cents.


-By Theopolis Waters, Dow Jones Newswires; 312-347-4965; theopolis.waters@dowjones.com