There is an expectation of beef prices continuing to firm and demand be strong going into the first quarter of 2022, Doug Houghton, analyst with Brock Capital Management told Reuters.

"There's also a feeling that wholesale beef prices are bottoming out, and that retailers will be restocking their shelves after the holidays," Houghton said.

Wholesale boxed beef prices were up, with choice cuts at $264.66 per cwt as of Tuesday afternoon, according to US Agriculture Department (USDA) data. Select cuts were also up to $256.09 per cwt.

US packers slaughtered 122,000 cattle on Tuesday, up from 120,000 cattle a week earlier and 118,000 cattle a year ago, the USDA said.

Beef packer profit margins surged to $245.95 per head on Tuesday - up nearly 11% from Monday and up more than 26% from a week earlier, according to livestock marketing service HedgersEdge.com's daily report.

CME February live cattle futures settled up 0.125 cent at 139.400 cents per pound. CME March feeder cattle ended the session up 1.950 cent to 165.225 cents.

Meanwhile, nearby US hog future contracts slipped, as the market spent most of the day reacting to a sharp drop in cutout prices on Monday afternoon, traders said.

The wholesale US pork carcass cutout prices fell by $5.14 to $86.33 per hundredweight (cwt) on Monday, the USDA said. Ham prices pulled back $19.58 to $61.07.

Pork carcass cutout prices did inch up 56 cents to $86.89 per cwt on Tuesday. But ham prices slipped 81 cents to $60.26.

Most-active February hog futures settled the day down 1.025 cents at 82.625 cents per pound. April hogs settled down 0.175 cent at 87.550 cents per pound.