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 per cent 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 (all figures US$).

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 81.8 cents per pound, up 2.55 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 hundredweight (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 55 cents 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 per cent, 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/cwt, steady with a week ago.

April closed at 128.3 cents/lb., down 0.5 cent. June rose 0.5 cent to 124.45 cents. August finished at 125.25 cents, up 0.45 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.

USDA data showed wholesale choice beef on Thursday at $196.90/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 0.45 cent/lb. lower at 140.475 cents. April ended at 142.625 cents, up 0.375 cents. May finished 0.35 cent higher at 144.925 cents.

— Theopolis Waters writes for Reuters from Chicago.