Smithfield Foods, the world's largest hog producer and pork processor, has agreed to be acquired by Shuanghui International Holdings Limited, a Hong Kong company. Shuanghui will pay $4.7 billion for Smithfield stock and assume $2.4 billion of Smithfield debt. It is the most costly acquisition of a meat company ever and the largest Chinese acquisition of a U.S. firm. There are no plans to change Smithfield management or operations. The acquisition needs shareholder and regulatory approval.

As of May 26, 86% of corn acres were planted, up from 71% the week before, but down from 99% a year ago.

Cattle Outlook: Fed cattle prices hold on light volumeFed cattle prices held steady this week on extremely light volume. Through Thursday, the 5-area average price for slaughter steers sold on a live weight basis was $124.81/cwt, up 36 cents from last week and up $2.91/cwt from the same week last year. Steer prices on a dressed basis averaged $199.06/cwt this week, down 79 cents from a week ago, but up $4.28 from a year ago.

Friday morning, the boxed beef cutout value for choice carcasses was $207.31/cwt, down $2.62 from the previous Friday and up $9.96 from a year ago. The select carcass cutout is at $187.51/cwt, down $3.60 for the week. The choice-select price spread is $19.80/cwt.

This week's cattle slaughter totaled 594,000 head, down 8.3% from last week (due to Monday's holiday), and down 0.7% from a year ago. May is the third consecutive month with steer and heifer slaughter at a higher level than implied by feedlot placements.

The average steer dressed weight for the week ending on May 18 was 843 pounds, up 1 pound from the week before and up 2 pounds from a year ago. This was the 71st consecutive week with average steer weight above the year-earlier level.

Year-to-date cattle slaughter is down 1.6%; but due to heavier weights, year-to-date beef production is down only 1.1%.

There was no Oklahoma City feeder cattle auction this week because of the Memorial Day holiday. Missouri market prices were steady to $2 higher this week with prices for medium and large frame #1 steers: 400-450# $143-$185, 450-500# $140-$180, 500-550# $136.50-$170.50, 550-600# $135.50-$166.75, 600-650# $129-$162, 650-700# $126-$154.75, 700-750# $122.50-$147.50, 750-800# $124.25-$142.50, 800-900# $115-$134, and 900-1000# $113.25-$129.60/cwt.

The June live cattle futures contract closed at $121.30/cwt today, up 73 cents from last week's close. The August fed cattle contract gained $1.23 from last Friday to settle at $120.45/cwt. October fed cattle futures settled at $123.75/cwt and December at $125.85/cwt.

August feeder cattle futures settled at $144.32/cwt, down 23 cents for the week. The September contract lost 10 cents from last Friday to close at $146.57/cwt. October ended the week at $148.12/cwt.

Source: Ron Plain and Scott Brown