* Higher cash prices, short-covering fuel buying * Most live cattle futures firm as funds roll * Feeders mimic mostly firm live cattle market By Theopolis Waters CHICAGO, March 7 (Reuters) - Chicago Mercantile Exchange lean hog futures on Thursday posted their biggest daily percentage rise in three months as higher cash prices triggered short-covering, said traders and analysts. CME lean hogs rose 3.23 percent on Thursday, their biggest one-day increase since Dec. 17, 2012. Advances pushed CME April and June hogs through their respective 10-day moving average resistance levels at 80.89 cents and 90.88 cents, attracting more buyers. Futures were also oversold based on their Relative Strength Index (RSI) on Wednesday at 21.18. A market with an RSI below 30 is considered technically oversold. "The market was oversold and may have run out of sellers. And cash appeared to be up this morning with a few plants needing hogs for this week," said R.J. O'Brien hog futures trader Tom Cawthorne. April hogs ended at 81.800 cents per lb, up 2.550 cents. June hogs climbed 2.575 cents to 92.025 cents. The average price for hogs Thursday morning in the eastern Midwest region was $1.92 per cwt higher from Wednesday at $74.06. But late on Thursday, hog prices in the most-watched Iowa/Minnesota market had fallen by $2.42 to a $75.64 average. U.S. pork packer margins on Thursday were a positive $0.55 per head versus a positive $5.05 on Wednesday and a positive $10.50 a week ago, according to HedgerEdge.com. Smithfield Foods, the world's largest pork processor and hog producer, beat third quarter earnings expectations helped by its packaged meat business. The company's stock posted its biggest one-day increase since early December 2010. The stock closed up 10.7 percent, or $2.38 a share, to $24.68 on Thursday. "I don't know if it (Smithfield) was supportive for the market, but it didn't hurt," said Cawthorne. MOST CATTLE UP AS FUNDS ROLL CME live cattle closed mostly higher featuring the official start of the Standard & Poor's Goldman Sachs Commodity Index (S&PGSCI) roll by funds, said traders and analysts. Funds that follow the index shifted their spot April long positions into June and August. Thursday was the first of five days for the (S&PGSCI) roll. They said April futures traded nearly in line with cash cattle in the southern U.S. Plains that moved at $128 per cwt, steady with a week ago. April closed at 128.300 cents per lb, down 0.500 cent. June rose 0.500 cent to 124.450 cents. August finished at 125.250 cents, up 0.450 cents. Investors await the sale of unsold cattle in Nebraska after beef packer margins turned positive for the first time in six months. HedgersEdge.com put beef packer margins on Thursday at a positive $5.10 per head versus a negative $10.30 on Wednesday and a negative $24.05 a week ago. It was last positive on Sept. 7, 2012 at $1.00. Although wholesale beef values continued their uptrend, some traders worry it may discourage meat buyers at higher price levels. What may discourage? USDA data showed wholesale choice beef on Thursday at $196.90 per cwt, up 82 cents from Wednesday; select cuts rose 29 cents to $195.09. CME feeder cattle followed the mostly firm live cattle market. March feeders settled 0.450 cent per lb lower at 140.475 cents. April ended at 142.625 cents, up 0.375 cents. May finished 0.350 cent higher at 144.925 cents.