SOFTS-ICE sugar ends flat, paring early loss; coffee turns lower
* Record sugar output for Brazil 2013 crop expected
* Brazil farmers withhold coffee, hoping for higher prices
* Cocoa remains stuck in tight range
(Recasts and updates prices to close)
NEW YORK/LONDON, Dec 18 (Reuters) - Raw sugar on ICE finished barely changed on Tuesday after tumbling initially on a supply surplus, as the sweetener continued its bid to recover from the more-than-two-year lows in price set last week.
Arabica coffee fell and cocoa also slipped although it remained stuck in a tight range. Dealings in soft commodities were mostly light ahead of next week's Christmas holiday.
March raw sugar futures on ICE eased 0.02 cent, or 0.1 percent, to settle at 19.39 cents a lb. The contract rose on Monday after dipping last week to 18.31 cents, the lowest level for the benchmark front month since August 2010.
"I don't see any reason why the market should continue its recovery," said Stefan Uhlenbrock, an analyst at F.O. Licht. "There's lots of sugar around and more to come, and there's no factor in play in my view that could support a sustainable rise in prices."
Societe Generale said the market faced resistance at 19.45-19.55 cents per lb, with the next resistance level seen at 19.95-20.10 cents per lb.
The spot contract left a technical gap between 19.06 cents and 19.14 cents in the two previous sessions, creating pressure, dealers said.
"Sugar had a good run the last couple days and had to fill that gap left from Friday to Monday," one U.S. dealer said.
March white sugar on Liffe settled up 10 cents at $520.90 per tonne.
Dealers said top producer Brazil's current center-south crop may exceed 34 million tonnes after favorable weather aided the tail of the harvest. They said prospects for the next crop were also positive.
"The market is already talking about another record figure of nearly 37 million tons of sugar from Center-South. In this situation, the sugar price is unlikely to make any great leaps upward," Commerzbank said in a daily commodities note.
March arabica coffee futures on ICE slipped 1.95 cents, or 1.3 percent, to finish at $1.44 per lb. The contract remained above last week's two-and-a-half-year low of $1.4220 but continued its downtrend.
Dealers and analysts noted that the market was well supplied following Brazil's large on-year crop in its biennial cycle and increased production from some Central American countries.
"I'm not seeing the end of this bear market around the corner because supply is ample. There's lots of coffee around, especially with this big Brazilian crop. A lot of it is still being withheld by local farmers because they are not satisfied with current prices," F.O. Licht's Uhlenbrock said.
"I'm afraid that they will have to sell at these prices or even at lower prices in the coming month, and this supply pressure will add to the already well supplied market."
March robusta coffee futures were up $1, or 0.05 percent, at $1,842 a tonne, paring early gains that took the market up $1,870.
Dealers monitored the narrowing of January's premium to March <LRC-1=R>, last traded at around $4 after widening to more than $50 in recent sessions.
Domestic coffee prices in Vietnam, the world's largest robusta producer, fell to the lowest level in more than 10 months on ample supplies, with the harvest expected to end this month, a little earlier than usual, traders said on Tuesday.
May cocoa on Liffe closed down 20 pounds, or 1.4 percent, at 1,519 pounds a tonne.
Dealers noted that both the London and New York markets continued to trade inside a tight range and were technically trendless, based on historical price charts. Arbitrage dealings weighed on the market as the firm pound was seen pressuring the London market, dealers said.
"We've got a 12-month range, a narrower almost three-month range, and a very narrow two-week range," a UK-based broker said. "The bulls and the bears have gradually narrowed the range, and something has got to give at some point."
March cocoa futures on ICE settled down $28, or 1.2 percent, at $2,397 a tonne.
(Additional reporting by Barani Krishnan in New York; Editing by Jane Baird, Keiron Henderson, John Wallace and M.D. Golan)