Holy Toledo, Batman, this market has been hot! Fed cattle set all kinds of post-BSE highs last week. Early trade was at $98 and late-week trade hit $99, fully $4/cwt. higher than the week before.

Boxed beef moved dramatically higher, as well, with the Choice price moving above $166 last week. And the long-awaited big move in the Choice/Select spread apparently has started, as it moved to over $11/cwt.

While the weather has improved dramatically the last several weeks, it continues to play big in this rally. Carcass weights continue to run 10-12 lbs. below year-ago levels, and it will take some time to recover that lost weight, especially considering $4/corn. The winter stress is also expected to continue to drive the Choice/Select spread to record or near-record levels this spring. In addition, the booming futures market helped drive the feeder market significantly higher.

So the question is, "where do we go from here?" It's safe to say the upside is somewhat limited. Consumer demand will be a key determinant the next several weeks in whether the beef complex can continue to show strength, thus returning some margin to the packing industry. Though the market is still saddled with $4 corn, with continued light placements, the supply and demand fundamentals remain in excellent condition.