Price volatility remains a factor in the feeder cattle market, but the past two weeks have brought higher prices.

Andrew Griffith, Extension ag economist with the University of Tennessee, says the August contract has moved above $152 per hundredweight.

“August feeder cattle futures have been on a roller coaster ride since the beginning of the year,” he writes in his weekly market outlook July 6. “The August contract nearly traded at the $156 price mark in mid- to late-February before bottoming out with a trade at the $135 price point in early April.

“The August feeder cattle futures price from early April through late June has bobbed, weaved, ducked and dived.”

Griffith says the remaining summer and fall contract months are trading similarly to August prices.

“Demand for feeder cattle was marked as strong, and this is likely due to reduced feeder cattle offerings due to strong feedlot placements the past few months,” he says. “There is a strong likelihood that feeder cattle prices will remain strong through the summer marketing period as is seasonally expected.”

Fed cattle prices were higher last week, with live prices in the $112 to $114 range. The five-area weighted average prices through Thursday were $110/cwt. live, up $3.65 from the previous week. That prices is about $7/cwt. lower than a year ago.

“Cattle feeders did not have any intention of doing any business prior to the mid-week holiday and then held out until Friday to do most of their marketing,” Griffith says. “The strategy paid off this week with strong gains on finished cattle prices.

“The higher prices may not pull closeouts completely out of the red, but it will reduce losses significantly and may make a few cattle profitable.”

He cautions that prices could still trend downward this summer, with the potential to drop as low as $105 still lurking.

“However, higher prices (last) week may be shedding some light that moving that low is not as likely as previously thought,” Griffith says. “The stronger live cattle prices have also strengthened cattle feeders’ outlook, which means strong demand for feeder cattle.”

Choice cutout prices topped $208 last week, down nearly $9 from the previous week. Griffith says some believe Choice beef could fall below $200/cwt.

“Though packers are well into triple digit profits per head, declining wholesale beef prices will have them on the edge of their seats and ready for action,” he says. “This is further exacerbated by stronger finished cattle prices this week.”

Jeff DeYoung is livestock editor for Iowa Farmer Today, Missouri Farmer Today and Illinois Farmer Today.