SOFTS-Arabica slumps, then soars as dollar falls from highs

* Robusta prices underpinned by declining Liffe stocks

* Bunge sees 8-10 mln T sugar surplus in 2012/13

* Slower arrivals underpin cocoa

(Recasts lead, updates arabica/sugar closing prices, adds paragraph 5)

NEW YORK/LONDON, Nov 28 (Reuters) - Arabica coffee futures on ICE surged nearly 4 percent on Wednesday, changing direction after hitting a 2-1/2-year low, as the dollar fell from its highs after U.S. House Speaker John Boehner expressed optimism about avoiding a fiscal crisis.

Cocoa futures climbed quietly while holding their recent ranges as dealers monitored bean arrivals in West Africa, which have been lower than expected. Sugar moved little on a lack of new fundamentals.

U.S. stock markets turned higher and the Thomson Reuters-Jefferies CRB index pared its losses following Boehner's comments that a deal could be reached to avert large tax hikes and spending cuts, which have the potential to tip the world's biggest economy into recession.

March arabica coffee futures jumped 5.70 cents, or 3.8 percent, to settle at $1.5485 per lb, their biggest one-day percentage rise since Sept. 10. The contract slumped to $1.4710 earlier in the session, the lowest level for the benchmark second month since June 2010.

The contract extended its gains in an outside reversal, having exceeded the previous session's low and high, triggering buy stops above $1.5150 per lb, dealers said.

While ICE arabica and Liffe robusta coffee futures turned higher, the December/March arabica discount widened to the biggest in nearly 27 years, closing at 10.2 cents per lb. This compared to Tuesday's settlement at 9.35 cents.

"To carry this coffee with the aging penalties, it's 3.5 cents a month to carry. You need the spread to be out to 9 cents in order to break even," said Nick Gentile, chief trader at Atlantic Capital Advisors in New Jersey.

The December contract is in its delivery period. There have been 270 lots stopped so far, ICE data showed.

"Now it's like a cat-and-mouse game to see if there's a short that will panic, pay (up) a little bit, or eventually these longs have to sell unless they want to take delivery," Gentile said.

December arabica open interest was small at 134 by Nov. 27, down 49 lots from the previous session.

"Arabica prices are down over 52 percent from the 2011 high. However, in our view, a potential deficit season in 2013/14 and an already large short speculator position will temper further downside," Rabobank said in a report on Wednesday.

On the Thomson Reuters-Jefferies CRB index, a global benchmark for commodities, arabica futures were the weakest performer so far in 2012, having dropped about 36 percent from the end of 2011.

(Graphic of CRB: http://link.reuters.com/kew48n)

Robusta coffee futures on Liffe were slightly higher, with recent price weakness leading to a slowdown in sales from Vietnam, while declining exchange stocks also helped to underpin the market.

January robusta futures rose $24, or 1.3 percent, to settle at $1,935 a tonne. The contract fell to $1,836 on Monday, the lowest level for the second month since Feb. 6.

Dealers said Liffe certified stock data, to be issued later this week, is expected to show a continued drawdown.

Liffe certified stocks stood at 108,580 tonnes as of Nov. 12, after falling by 17 percent since the start of October.

Cocoa futures on ICE edged higher with March settling up $11, or 0.4 percent, at $2,458 a tonne as the market continued to lack any clear overall trend.

The flow of beans in top growers Ivory Coast and Ghana has been behind last year's pace, providing some support, dealers said.

"In the wings there's some debate going on about arrivals, about deficits, looking at slightly improved demand, so that's sort of underpinning things," a London-based broker said.

Benchmark Liffe March cocoa futures closed up 11 pounds, or 0.7 percent, at 1,571 pounds a tonne.

SUGAR CHOPPY

Raw sugar futures were little changed, with March closing down 0.07 cent, or 0.4 percent, at 19.16 cents a lb. The market moved sideways as the prospect of a substantial global surplus in 2012/13 prevented steeper gains.

Global sugar production in 2012/13 should exceed consumption by between eight and 10 million tonnes, Ben Pearcy, managing director for sugar and bioenergy at agribusiness giant Bunge, said.

Dealers said the market had settled down to drift in a narrow band after rebounding from a two-year low for the front month of 18.66 cents set on Nov. 9.

"In the next six months we'll have a range of between 16 and 20 cents," said Jonathan Drake, head of sugar at RCMA, speaking at the International Sugar Organization seminar in London.

Drake said that as there is always reluctance to sell below the cost of production - which he estimated at 17 cents to 18 cents - the market was likely to "grind lower."

March white sugar on Liffe fell $1.10, or 0.2 percent, to end at $509.60 per tonne.

(Additional reporting by Stephen Eisenhammer and Sarah McFarlane in London; editing by Alison Birrane, Keiron Henderson and John Wallace)