Feeder cattle futures made new contract highs recently due to tight available supplies and stronger fed cattle prices. While it's not unusual to see a correction after a surge higher, prices are expected to be well supported into the fall period.

U.S. feeder cattle were $1 to $3 higher in the last week of August on average, with stronger demand stepping forward for lighter-weight calves. Feedlots felt comfortable paying $120 for 8-weight steers, even though comments from auction markets reflected that cattle were quite green and thin.

Total feeder-cattle numbers outside U.S. feedlots as of July 1 were down nearly 1 million head from 2009.

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