Cattle prices rebounded back towards their highest levels since 2008 on Monday, following data showing that the number of animals on US feedlots had hit their lowest for six years.

Live cattle for April delivery touched 99.875 cents a pound in early deals in Chicago, within half a cent of an 18-month high for a spot contract touched two weeks ago.

The increase followed data showing that the number of cattle on feedlots had fallen by 3.6% below 10.8m head from a year before, the lowest start-of-April figure since 2004.

"The report was clearly bullish," Dennis Smith at broker Archer Financial Services said.

"This report does nothing to alleviate the tight supply situation facing beef packers."

 'Sharp cash rally'

The decline, which more severe than the 2.9% drop forecast by analysts, reflected a rush by feedlots to cash in on rising beef prices, which have been boosted by economic recovery at a time of tight cattle supplies.

"Cattle feeders saw a sharp cash cattle rally going on and threw what numbers were near market weight at packers," Allendale, the Chicago broker, said.

The number of cattle sold for slaughter rose by 4.3% in March compared with a year before, in line with forecasts, the US Department of Agriculture data showed.

Placements fall short

However, the rise in the number of animals placed on feedlots, unexpectedly, fell short of growth in the number marketed.

"The lower placement figures will help August [contract values]," said US Commodities, which had warned that a surge in feedlot purchases in the spring could feed through into a looser market in the summer.

The August contract touched 94.35 cents a pound in early deals, 0.125 cents from a 19-month high for Chicago's third-in live cattle lot.