SOFTS-Cocoa at multi-month lows, robusta coffee rallies

* Cocoa near 7-month bottom on Liffe, 5-month low on ICE

* Raw sugar claws back from early loss, white sugar slips

* Robusta coffee ends near 2-week high, arabica falls back

(Recasts and updates throughout with settlement prices, new trader quote)

NEW YORK/LONDON, Dec 20 (Reuters) - Cocoa hit multi-month lows in U.K. and U.S. trading on Thursday as technical selling pressure and liquidation by funds seeking to balance books before the year-end weighed on the confection and beverage commodity.

In coffee, London's robusta neared a two-week high, extending for a third day a rally driven by strong demand for Vietnam-grown robustas. New York's higher premium arabica fell back after a one-day gain.

White sugar futures also slipped in London trading, while raw sugar in New York clawed back early losses to close a touch higher.

"What's happening in softs isn't peculiar if you compare it to the broader agricultural markets, which are all taking a hit as the year-end approaches," said Mike McDougall, analyst at Newedge in New York.

Cocoa futures on London's Liffe sank to near seven-month lows, breaking significant support levels on historical price charts, after downward pressure from technical charts combined with forward selling from producers in West Africa.

Liffe's most actively traded second month futures contract for cocoa, May, closed down 12 pounds at 1,480 pounds per tonne after sinking earlier to 1,466 pounds -- the lowest level for a second month since May 31.

"We're breaking to the downside. We've clearly gone through a key technical point in London of 1,509 pounds basis the second continuation month," said Eric Sivry, head of agri-options brokerage at Marex Spectron.

Even so, not all were looking to sell their Liffe positions in cocoa, he said.

"We've broken the range and now there's a path that's open to go to lower levels, but speculators are very long and may want to avoid a bloodbath before (the) year-end," Sivry said. "Secondly, the industry (is) buying a lot of cocoa on a scale-down basis."

In New York, cocoa's most active position, the front-month March , settled down $30, or 1.3 percent, at $2,328 a tonne on ICE Futures U.S.. The contract set a bottom of $2,311 during the session, which marked a near five-month low.

ICE cocoa has been having its worst stretch in six weeks, with the market falling without let-up since Monday and heading for a weekly loss of 4 percent.

"Supply issues are weighing on cocoa now, with Ivory Coast's bean exports picking up and Ghana starting to sell next year's crop," Newedge's McDougall said.

In Asia, sales of cocoa butter -- one of the primary ground products from cocoa beans -- was at its highest ratio in three years to sales of cocoa powder, dealers said. Both cocoa butter and powder are integral to chocolate making.

Some cocoa grinders were, however, holding on to their butter stocks to persuade consumers to also buy powder, dealers said.

RAW SUGAR, ROBUSTA REBOUND FROM EARLY LOSS

March raw sugar on ICE finished up 0.2 cents at 19.25 cents a lb, after a session bottom of 18.81. Last week, the contract dipped to 18.31 cents, its lowest level for a benchmark front month sugar contract since August 2010.

Despite its attempt to rebound, dealers said they saw little upward potential for raw sugar in the near term due to producers limiting their offers at around 19.5 cents a lb.

With forecasts for the 2012/13 global surplus in raw sugar also on the rise, producers were likely to settle for even lower prices, dealers said.

"This is the reason why each time we have a rebound, the top of the rebound is lower and lower - it's declining," an European analys in raw sugar said.

In white sugar, Liffe's March contract closed down $1.60, or 0.3 percent, at $516.20 per tonne after an intraday low at $508.90.

Arabica coffee on ICE continued to hover above a 2-1/2 year low set last week with plentiful supplies following a bumper crop in Brazil keeping the market on the defensive.

Arabica coffee's most active contract on ICE, March, settled down 1.95 cents, or 1.3 percent, at $1.4295 per lb. March, which until Tuesday was a second month position, fell to $1.422 a lb last week, the lowest level for a second-month arabica contract since June 2010.

"I think we will see a new low on New York before the end of the year," a London-based coffee broker said, noting the bearish fundamentals of the over-supplied market.

"Roasters have done what they need to do at these prices and they don't want to push the market higher."

Liffee's robusta coffee for March rose $18, or nearly 1.0 percent, to finish at $1,887 a tonne, after falling as low as $1,870 during the session.

Dealers said shipments from top robusta producer Vietnam were running at above last year's pace, but strong demand was helping keep Liffe certified stocks at low levels.

Vietnamese robustas were offered at smaller discounts this week as trading houses stocked up before the end of the crop season, while demand from domestic roasters kept Indonesian premiums at their strongest since May, dealers said on Thursday.

In Brazil, the government allowed coffee growers to defer payment by up to 60 days on state-subsidized loans coming due this month and in January -- giving a breather to farmers pressured to sell at a time when prices of cocoa beans were sliding.

(Additional reporting by Nigel Hunt; Editing by Anthony Barker and Chizu Nomiyama)