Live cattle spiked at the open on short covering and October and December's contracts oversold Relative Strength Index situations.

However, upward cattle momentum faded soon after October and December peaked above Tuesday's highs. Also, buying dried up after bulls realized they put more distance between front-month contracts for cattle and last week's disappointing cash sales.

Commercials dumped positions as the morning wore on, tripping sell stops. October drifted lower after filling a June 28 chart gap. Meanwhile, Chicago Board of Trade corn's run up slowly deflated far-month cattle contracts.

Additionally, midday boxed beef's weakness contributed to the negative market tone. That, along with futures' morning declines, dampened bullish optimism for steady-to-higher cash prices this week.

But suddenly and without provocation, cattle contracts slumped, which set off a chain reaction of fund and commercial selling and additional sell stops. That put in new session lows and knocked October and December to their lowest levels in three months.

Source: FXSTREET