Bullish cattle futures Thursday and Friday, as well as the brisk upturn in fed cattle prices Friday should ofer some firm underpinning to the start of the week. At the same time, there continues to be plenty of wariness about the whereabouts of "too high."

“We’re about as scared of a market going up like this as we are of one going down,” a stocker operator told me this week as he flipped back and forth through futures prices scrolling across his computer screen.   

For one thing, requisite equity and operating capital is already in the stratosphere and looks to be heading higher. At the CattleFax Industry Outlook in Nashville two weeks ago, analysts pointed out operating a cow-calf operation in 2009 required 60% more capital in 2000. On the feeder side of the fence, if you figure 20% equity required to finance a calf in the feedlot, $130 more per head is required today ($300) than in 2000 ($170).

Then there’s the roller-coaster price volatility that opens windows of opportunity that seem to close quicker than a blink.

It’s this kind of uneasy optimism that will likely characterize the market this week, especially given the speculation that will occur surrounding Friday’s monthly Cattle on Feed report.