Another 29 people were injured, said Nigerian military spokesman Col Dahiru Abdussalam.
The market in Potiskum, Yobe state, was set on fire by gunmen armed with explosives.
Police say the attack may be in revenge for the killing by traders of a man who had earlier tried to steal cattle.
The joint taskforce, a combined operation between Nigeria's army and police, is pursuing the "unidentified gunmen", Col Abdussalam said.
"A group of gunmen armed with around 20 explosives and assault rifles attacked the Potiskum cattle market," police spokesman Toyin Gbadegesin told the AFP news agency.
"They threw explosives and shot indiscriminately, setting fire to the market, killing lots of livestock and wounding many people, mostly cattle dealers," he said.
A gang of men locked the gate of Potiskum's fenced cattle market, trapping many traders and livestock inside, residents told the BBC.
The market - a bustling trading hub, with cattle on sale from neighbouring Chad, Cameroon and Niger - was razed to the ground late on Wednesday and many animals were also burned to death, residents say.
Witnesses say they saw several bodies being removed from the market.
Correspondents say the attack does not appear to be the work of the radical Islamist group Boko Haram, which has carried out deadly bombings and shootings across northern Nigeria, including Potiskum, in the past 20 months.
Cattle raids are common in the north of Nigeria.
At least 34 people have been killed in an attack on a cattle market in north-eastern Nigeria, security officials have told the BBC.