Cattle futures rose consecutively on bets that US meatpacker demand for animals will increase as profit margins improve.

Wholesale choice beef climbed 0.3% at midday (Mar 31) to US$1.6396 a pound, extending a rally to the highest level since August 2008, according to the USDA. Meatpackers have processed 377,000 cattle this week, 3% more than last week. Packers may pay more for cattle for immediate delivery as rising meat prices boost profit.

"If the packer wants to bid up, he has the margins for that now," said Chad Henderson, a market analyst with Prime Agricultural Consultants Inc. in Brookfield, Wisconsin.

Cattle futures for June delivery rose 0.375 cent, or 0.4%, to 93.55 cents a pound on the Chicago Mercantile Exchange. The most-active contract was up 8.6% in the first quarter.

Feeder-cattle futures for May settlement jumped 2 cents, or 1.8%, to US$1.12975 a pound, capping a 17 % gain this quarter. The price rallied as corn costs dropped after a government report showed the largest US inventories for March since 1987.

"Any time you're down in grains, feeder cattle should have the upper hand," said Mark Schultz, the chief analyst at Northstar Commodity Investment Co. in Minneapolis. Cheaper livestock feed often spurs herd expansion.

Hog futures for June settlement fell 0.15 cent, or 0.2%, to 82.9 cents a pound. Earlier, the price touched 84.25 cents, the highest level for a most-active contract since May 1997. The June contract was up 7.3% in the first quarter.

Traders sold contracts to take advantage of prices that have climbed 6.2% since March 26, Schultz said. On that date, the USDA reported that the sow herd shrank to the smallest size on record as extended losses forced farmers to cull pigs.

Wholesale pork fell 0.2 % to 72.76 cents a pound on March 31 after jumping 3.1% in the previous two days.