I would try using a fifo (in a console)
mkfifo myfifo
and then running my program from matlab using
system('myprogram > myfifo &');
and then read program output just like a normal file:
h = fopen('myfifo','r')
fscanf(format,...)
in this way you can read your program while it's running, and the fifo works like a buffer, when it's empty the fscanf returns empty variables.
I hope this helps.
