SOFTS-ICE sugar down after hitting 3-wk high, cocoa at new lows
* Raw sugar upside seen capped by global surplus
* Arabica coffee could fall further if Brazil sales pick-up
* Cocoa downside limited with market seen balanced
* COMING UP: Markets to shut Jan. 1 for New Year holiday
(Recasts lead, updates closing arabica/sugar prices)
NEW YORK/LONDON, Dec 28 (Reuters) - Raw sugar futures on ICE turned lower after hitting a three-week high on Friday, loosing upward momentum after extending a rebound above the 50-day moving average.
Cocoa also dipped, touching the lowest level in months, while arabica coffee remained on track for its biggest yearly decline since 2000.
Overall volume in the softs complex remained thin with many dealers away from their desks between the Christmas Day holiday on Tuesday and the upcoming New Year holiday on Jan. 1.
Raw sugar futures have been rebounding from a drop earlier this month to the lowest levels in more than two years. Cocoa has dropped every day for more than a week after a fall below the 200-day moving averages in mid-December triggered technical sell signals. Arabica coffee is on track for the weakest annual performance of the 19 commodities on the Thomson Reuters-Jefferies CRB index.
March raw sugar futures on ICE closed down 0.03 cent, or 0.2 percent, at 19.42 cents a lb, after hitting a three-week high of 19.58 cents.
The sugar market had breached some resistance levels during the run-up in prices this week, including 40-day and 50-day moving averages. But dealers said producer selling above 19.50 cents threatened to cap the advance.
"Sugar prices have seen a bit of a rebound, but our outlook for the market remains quite negative," Credit Suisse analyst Tobias Merath said.
The market sank to 18.31 cents earlier this month, its lowest since August 2010. Prices have been pressured by rising stocks as production has outpaced demand.
"We think the market is very well supplied, and there is very little potential for any rebound to be sustained," Merath said, adding his three-month price forecast was 18 cents.
March white sugar on Liffe changed direction and closed down 40 cents, or 0.08 percent, at $522.00 per tonne.
COCOA EXTENDS DAILY LOSSES
Cocoa prices were slightly lower with March futures on ICE closing down $6, or 0.3 percent, at $2,249 per tonne its lowest settlement since July 25. The contract closed lower for the ninth straight session.
The spot contract is down more than 10 percent for the quarter, its first weak quarter in a year.
"There seems to be plenty of offer around. We should be getting to the tail end of the West African harvest pretty soon," said Jack Scoville, a vice-president with The Price Futures Group in Chicago, referring to the reason for nudging lower.
The contract extended losses after falling below the 200-day moving average last week at $2,368, attracting chart-based selling and long liquidation by speculators who are holding a large net long position.
Credit Suisse's Merath, however, said cocoa had the potential to move a bit higher with economic indicators stabilizing and the global market expected to be roughly in balance in 2012/13.
Liffe May cocoa inched down 3 pounds, or 0.2 percent, to settle at 1,445 pounds, a tonne after hitting 1,441 pounds, the lowest level for the second month since June 1. It closed lower for the eighth straight session after falling below the 200-day moving average at 1,541 pounds on Dec. 17.
Put selling in the options market was also seen weighing on futures, with significant open interest seen at 1,450 pounds.
Valid cocoa stocks in NYSE Liffe's nominated warehouses rose to 51,070 tonnes as of Dec. 24, from 48,330 tonnes on Dec. 10, exchange data showed.
A union representing dockworkers on the U.S. East Coast has reached a labor agreement with shippers that will avert a strike that threatened to wreak havoc on the U.S. economy.
Arabica coffee futures on ICE changed direction and moved slightly lower, as the market continued to consolidate after falling earlier this month to the lowest levels in more than two years at $1.4220 per lb, basis the second position.
March arabica coffee futures on ICE dropped 1.05 cent, or 0.7 percent, to settle at $1.4685 per lb.
"We have seen a little bit of a rebound, but it hasn't gone very far ... This is a market where fundamentals are deteriorating," Merath at Credit Suisse said.
The spot contract has fallen more than 35 percent in 2012, its weakest annual performance in 12 years and by far the weakest commodity on the CRB, a global benchmark for commodities. The second weakest performer to date is frozen concentrated orange juice <0#OJ:>, which is down nearly 18 percent.
Brazil has harvested a large coffee crop this year, but exports so far have lagged last year's pace, Merath said.
Dealers have cited a reluctance of producers in Brazil to sell following a sharp decline in prices as one factor in the slow pace of exports.
"Our concern is that at one point in time the good crop will arrive in the market ... The downtrend (in prices) is likely to continue," Merath said, adding his three month price forecast was $1.40 per lb and 12-month forecast was $1.30 per lb.
March robusta coffee futures settled down $9, or 0.5 percent, at $1,911 a tonne.
Certified coffee stocks held in NYSE Liffe nominated warehouses rose to 106,540 tonnes as of Dec. 24, up from 105,140 tonnes on Dec. 10, exchange data showed.
(Reporting by Nigel Hunt in London and Marcy Nicholson in New York; Editing by Anthony Barker, Jane Baird, David Gregorio and Marguerita Choy)