SOFTS-ICE sugar, coffee pull away from lows, cocoa eases
* Speculators increase net short in ICE raw sugar
* Gains in Ivory Coast boost mid-crop cocoa outlook
* Low stocks support front month robusta premium
(Adds details, quotes, updates prices)
LONDON, Dec 17 (Reuters) - Raw sugar and arabica coffee futures on ICE were higher on Monday with both markets regaining some ground after falling last week to the lowest levels in more than two years.
Cocoa futures on ICE were slightly lower as rains improved the outlook for crops in parts of top grower Ivory Coast.
March raw sugar futures on ICE were up 0.19 cents or 1.0 percent at 19.20 cents a lb at 1540 GMT. The contract has rebounded after dipping last week to a 18.31 cents, the lowest level for the benchmark front month since August 2010.
Dealers said a huge speculative net short position had left the market susceptible to sporadic short covering rallies.
"The commitment of traders report showed there was quite a few people short and we've had a little bounce," said a London-based broker.
"It's unlikely to get much higher because each time prices get to 20 cents it gets sold off."
Speculators increased their net short position in raw sugar contracts on ICE Futures U.S. to the most in more than five years in the week to Dec. 11, U.S. Commodity Futures Trading Commission (CFTC) data showed on Friday.
"We've been these CoT (commitment of traders) induced rallies before and suspect once this is fully digested, normal service on the downside will be resumed," Nick Penney of Sucden Financial said in a market note.
Concerns over whether the U.S. economy will avoid a "fiscal cliff" of tax hikes and spending cuts were expected to cap gains in commodities markets due to the negative impact on riskier asset classes.
"You will see some short covering now we are back above 19 cents but the majority will wait until you hear from the U.S. (on a resolution to the so-called fiscal cliff) before you go long," said Andrey Kryuchenkov, analyst at VTB Capital.
"For the market to regain confidence, people will wait until they hear on that."
March white sugar on Liffe rose $7.00 or 1.4 percent to $515.70 per tonne.
March arabica coffee futures on ICE were up 1.5 cents or 1.05 percent at $1.4465 per lb. The contract dipped to $1.4320 last week, the lowest level for the second month since June 2010.
"The market is well supported at these levels although it could come down to around $1.30," said a London-based broker, noting there was limited roaster buying.
"Roasters are quite happy at the moment and don't need to do anything much."
March robusta coffee futures were down $17 or 0.9 percent at $1,855 a tonne.
Dealers said they were continuing to keep a close watch on January's premium to March <LRC-1=R>, which has widened to around $50 in recent sessions, partly due to depleted certified stocks.
"This is a reflection of what's happening on the physical market, certified stocks are low," said a London-based broker, adding the premium could widen further to $60-$70.
Cocoa futures were slightly lower with March futures on ICE off $12 or 0.5 percent at $2,423 a tonne.
Dealers noted rains in some parts of Ivory Coast were improving the outlook for the country's mid-crop with dry Harmattan winds, which blow south from the Sahara Desert from December to March, progressing across the country but yet to reach the cocoa growing regions.
Weather was mixed last week across Ivory Coast's main cocoa growing regions with some areas receiving showers while others saw dry, hot conditions, farmers and analysts said on Monday. 1/8ID:nL5E8NH8TE 3/4
Latest data from Ivory Coast and Ghana showed the flow of cocoa out of West Africa continued to trail last year's pace after a slow start to the season.
Cocoa arrivals at ports in top grower Ivory Coast since the start of the season in October stood at around 488,000 tonnes by Dec. 16, exporters estimated on Monday, down from 578,368 tonnes in the same period of the previous season.
Ghana's cocoa purchases reached 347,043 tonnes by Dec. 6 since the season started, down 22.7 percent compared with the same period last year, data from industry regulator Cocobod showed on Monday.
May cocoa on Liffe was off 10 pounds or 0.6 percent at 1,541 pounds a tonne.
(Editing by Alison Birrane)