The Nov. 1, cattle-on-feed (COF) report set an all-time record for the month of November, at least since the new series began in 1996. The COF number came in at 12 million head, so there are a lot of cattle on feed.

Perspective is important, however, as this number is only 4% above last year, and the drought spurred a lot of early placements. This is highlighted by the fact the October placement also was the second lowest on record and came in at 87%, which was below expectations. Marketings came in at a healthy 2% above last-year levels.

We've certainly seen the lows from a numbers standpoint in this cattle cycle, but numbers certainly are not the driver in this lower market. In fact, high feed costs, drought conditions and the dramatic drop in feeder prices all combined to create another run of cow liquidation, which means numbers will remain very manageable out front.

The lower prices can be explained with two words -- higher corn. The feeder and calf market showed signs of stabilizing this week, fear is subsiding, and the market will return to fundamentals. More than anything, the corn market is reacting to three, bin-busting harvests in a row, and the fact corn supplies aren't increasing due to continuously building demand.
-- Troy Marshall