I made two nets out of baling twine, they each hold about 50lbs of hay, 5 thick flakes. Had to make the holes a bit bigger to accommodate for the oat hay. I've watched mine, they do pull out a little at a time and hay consumption is down a good 30%.
Mine hang between two fenceposts resp. between two poles in the shed. We don't have very much rain here but I think that if the hay gets wet it shouldn't do much, since the water can get out.
I wouldn't put it on a pallet, tho, too dangerous when they do step on it. You could lay it on a rubber stall mat to keep it out if the dirt. Oh, and no shoes on horses with slow feeder nets!