The volatility in the feeder cattle market appears to be subsiding.

According to the Livestock Marketing Information Center (LMIC), yearling prices in Oklahoma City averaged nearly $7 per hundredweight higher over the first half of 2018 compared to prices a year ago. The same holds true for steer calves.

“The increase in value was achieved while price swings in the market have subsided,” the center says in its analysis. “The spread between the low and high prices during the first 26 weeks of 2018 was $17.77/cwt. for yearling steers. Last year, the swing in prices from the high to the low for the same weeks was $34.82.”

The LMIC says yearling price swings this year will be the lowest since 2012. This is good news as price swings over the past several years have been much sharper, according to LMIC.

“During the last 25 years, the most frequent annual price range was $15-$20,” LMIC says. “So far this year, the swing in monthly average prices has been $9.39. The difference in the magnitude of price swings based on weekly versus monthly data makes a statement about how much price volatility has been experienced within some of the months, even though price volatility has been less than in past years.”

Based on what the market has experienced thus far in 2018, LMIC estimates an annual price range of $15 to $20 is likely.

“Given the price volatility that has been seen in the market in the first half of the year, an annual price range of $15-$20 has the highest probability, which infers that the chances for prices above $160 would not be a strong bet,” the center says.

Expectations of another large corn crop have prompted cattle feeders to aggressively pursue cattle.

“Cash prices out of Western Kansas, which had been dogging (negative basis) the August feeder cattle contract for weeks, suddenly flipped on the week of the acreage report,” the center says. “In the fourth year of expansion, aggressive cash bidders are a good sign for the industry even if it comes with some added volatility in the second half of the year.”

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