SOFTS-Short-covering lifts arabica to 1-month high in late rally
* Brisk flow of Brazilian export sugar
* Arabica volume jumps to highest in nearly 2 months
* Trade awaits Q4 Europe, N. American cocoa grind next week
(New throughout, updates closing prices; adds trade comment, second byline/dateline)
NEW YORK/LONDON, Jan 11 (Reuters) - Arabica coffee futures on ICE jumped more than 2 percent on Friday to a one-month high in heavy volume, led by short-covering late in the session after climbing above key levels and getting a boost from the weak U.S. dollar.
Raw sugar futures trading on ICE Futures U.S. rose in thin dealings late in the session, breaking above 19 cents and attracting some chart-based buying. The cocoa markets inched lower in rangebound dealings as the weak pound against the U.S. dollar weighed on the U.S. market.
In coffee, arabica futures trading on ICE Futures U.S. jumped late in the session after the benchmark contract broke above the 40-day and 50-day moving averages, triggering a wave of short-covering, dealers said.
The weak U.S. dollar also helped lift the market, attracting buyers dealing in other currencies, they said.
Arabica futures were little changed for most of the session but rallied late in the day after hitting certain technical levels.
"We're breaking out a little bit of the downtrend so you're getting a bit of short-covering,", said Spencer Patton, founder and chief investment officer of Steel Vine Investment in Chicago.
ICE March arabica coffee settled up 3.70 cents, or 2.5 percent, at $1.5335 per lb. Total volume soared late in the session to around 34,400 lots, the heaviest since Nov. 19, preliminary Thomson Reuters data showed.
"The large short spec position is starting to cover," said one U.S. dealer.
March robusta coffee futures gained $14, or 0.7 percent, to end at $1,944 a tonne.
Raw sugar on ICE extended its gains late in the session in thin dealings, rising for the third straight day after hitting an intraday one-month low on Wednesday.
"I was surprised sugar did not strengthen more as the euro rallied," one Paris-based sugar futures broker said.
Expectations of big raw sugar and arabica coffee supplies from Brazil, the world's top sugar and coffee producer, and slim prospects for a tightening global supply/demand picture in both commodities, prevented stronger gains.
Dealings were thin as the bulk of the rebalancing by index funds appeared to have been completed, one New York dealer said.
"There is no massive conviction about a possible tightening of the market balance in the near term," said Sudakshina Unnikrishnan, soft commodities analyst with Barclays Capital.
"The sugar export figures from Brazil are in very good shape. The expectations are very good for the next center-south Brazilian crop."
March raw sugar futures on ICE gained 0.21 cent, or 1.1 percent, to close at 19.17 cents a lb.
"In the medium term we continue to expect a test of the recent low at 18.31 cents, but in the short term we are conscious that a break of 19 cents may well trigger a short-covering rally to resistance around 19.40/50," said Thomas Kujawa of brokerage Sucden Financial.
March white sugar on Liffe closed up $1.60, or 0.3 percent, at $514.80 per tonne.
FAVORABLE COCOA WEATHER
Favorable weather for development of the 2013 West African mid crops due to start around April had contributed to the easing of ICE cocoa futures, which stood above the 5-1/2 month low touched on Jan. 9.
Dealers awaited release of European and North American fourth-quarter grind data, a measure of demand, due to be released next week, after disappointing figures in the previous quarter.
Benchmark London May cocoa futures settled down 6 pounds, or 0.4 percent, at 1,445 pounds per tonne.
The Liffe market was consolidating after moving in a tight range over the past week.
ICE March cocoa futures eased $13, or 0.6 percent, to finish at $2,256 per tonne.
Cocoa butter, a key ingredient of chocolate, remained at three-year highs in Asia amid thin trade, but volumes are expected to pick up within the next few weeks as buyers start stocking up ahead of Easter, traders said.
(Editing by James Jukwey and Jim Marshall)