The recent run-up in prices has been exciting for cattle feeders, stocker operators and cow-calf producers who are contracting calves. Last week, most of the deferred months climbed above $1/cwt., and the feeder market either set or approached new contract highs, as well.As is always the case, some would point out this latest run was overdone, that the recent heat wave will temper demand, and the reclosing of the South Korean market will hurt. Plus, with all the good news that the corn market has received, we're likely also due for some weather concerns. These are valid points, but it's always helpful to step back and look at the fundamentals of supply and demand, and they remain quite positive. South Korea is expected to reopen, and there are strong signs it will now be serious about normalizing trade. Japan also is indicating it's likely to accept cattle 30 months of age or younger. While we certainly have to win back the market share we've lost, the market has been instructive on not only the strength of demand for U.S. product but also the loyalty that Asian customers seem to be showing despite all the negative publicity. The export situation has added significant dollars to the market, and it's only expected to improve from here. Domestic beef demand was up modestly the first six months of the year, and while heat waves are never good this time of year, beef demand seems to be on solid footing. Supply-wise, things are also positive; fewer cows and a smaller calf crop together signal that supplies will be short and are likely to tighten even more once expansion actually does start. But any increase in numbers is a ways out. Corn prices have moderated, and indications are we're poised to harvest the largest crop on record. No one is predicting $2/bu. corn, but it looks like we won't be feeding much $4 corn, either. Higher corn prices are also pushing feeders to stay current in their marketing. To be sure, we are facing higher energy and feed costs. But the trend is heading in the right direction and we're below the concerning expectations of early summer. All in all, the market fundamentals continue to point to a good next couple of years.