CHICAGO (Dow Jones)--Chicago Mercantile Exchange live cattle closed higher Monday in response to last week's better-than-expected cash cattle prices, buy stops and U.S. stock market advances.

Pork bellies ended up a tad. Feeder cattle posted a two-tiered settlement. And, lean hogs finished narrowly mixed.

Live cattle firmed from the start after packers on Friday paid up to $84 per hundredweight for cash-basis supplies. Fed cattle earlier in the week brought $78 to $82.

"Packer margins were on the mend and boxed beef prices were doing well enough to force packers' hand," a veteran cattle broker said. "If they didn't need them [cattle], they would not have bought them."

Live cattle traders quickly focused on cash after Friday's monthly U.S. Department of Agriculture cattle-on-feed report results were deemed a nonevent.

October and December ignited buy stops that caught the attention of funds, especially after December punched through the 40-day moving average resistance barrier.

And, besides the Dow's more than 100-point leap, live cattle bulls were motivated by higher Chicago Board of Trade corn and the weak U.S. dollar against some foreign currencies.

Deutsche Bank's involvement in the CME live cattle market was not visibly noticeable. However, some cattle traders believe Deutsche Bank may be working with a firm that is handling various accounts, which makes it easier to camouflage its efforts.

Deutsche Bank is restructuring some of its grains positions into the CME livestock sector amid a crackdown by U.S. regulators. The process was scheduled to begin Monday and conclude by the end of October.

"We noticed some speculative fund buying that might be tied to the Deutsche Bank situation," a brokerage firm's cattle trader said. "We bought December live cattle with that in mind."

Live cattle traders on Tuesday will wait for fed cattle developments as cash buyers and sellers continue to evaluate how many cattle will be available for sale this week.

Cattle market participants will maintain their watch for potential deliveries and Deutsche Bank's movement in live cattle and lean hog futures.

October live cattle settled 60 points higher at 84.70 cents a pound, and December closed 65 points higher at 86.45 cents.

October through January feeder cattle ended firm on live cattle buying, buy stops and November/January bull spreads.

Other feeder cattle contracts landed in bearish territory on profit-taking, futures' premiums to CME's feeder cattle index and expensive feed.

October feeder cattle settled up 25 points at 94.80 cents, and November closed up 40 points at 95.52 cents.


Pork Complex

Lean hogs closed narrowly mixed on spreading into deferred contracts out of front months fueled by U.S. dollar softness, U.S. stock market firmness and CBOT corn's abrupt run-up.

Hog contracts fluctuated throughout the volume-challenged session as bullish and bearish traders alike strained for solid market leadership.

Hog bulls were encouraged by late Friday's modest pork cutout price increase and pockets of firm cash hog prices on Monday. Market shorts, however, downplayed fundamentals' influence on spot-December, whose expiration is almost two months away.

Bears also pointed to "excessive" daily hog slaughters, December and February premiums to CME's hog index, and both months' overbought chart conditions.

Hog futures participants were unmoved by confirmation that a pig in Minnesota contracted the H1N1 influenza, or swine flu, and Deutsche Bank's dealings with CME hogs.

"People finally get it that you can't get swine flu from eating pork," a CME livestock trader said. "If I'm a pig, I'd be more afraid of catching the flu from people than the other way around."

The trader also said that because Deutsche Bank doesn't have a trading desk on the CME trading floor, it is expected that they would "back door" their transactions through another operation. Furthermore, he said, their investments in CME hogs is probably relatively small compared with other commodities.

Cash hog bids are seen mostly steady to possibly weak on Tuesday. Processors are thought to have near-term supplies well in hand while conserving profitable profit margins.

Hog market bulls and bears again will probe for market direction primarily because of the ongoing disconnect between current fundamentals and spot-December futures.

December hogs ended down 5 points at 54.05 cents a pound. February finished up 2 points at 60.82 cents. The contract earlier hit a three-month high.

February pork bellies closed up 10 points at 81.95 cents a pound and in line with its 20-day moving average.

Other belly contracts were unquoted.

CME's weekly belly storage report will be released Tuesday after 5 p.m. EDT.


-By Theopolis Waters, Dow Jones Newswires; 312-559-4965; theopolis.waters@dowjones.com