SOFTS-ICE cocoa at fresh 6-month lows on plentiful supplies
* Cocoa sinks to lowest level since July 2012
* Sugar on track for worst weekly performance since October
* Arabica buoyed by disease fears
(Adds new dateline, byline, comment; updates prices)
NEW YORK/LONDON, Jan 25 (Reuters) - Cocoa futures on ICE sank to a fresh six-month low on Friday as growing supplies from top producer West Africa and weakening technicals accelerated speculative selling in chocolate's main ingredient.
Raw sugar eased and arabica coffee edged higher on concerns about the impact of tree disease on crops in Central America, which makes a fifth of the world's highest quality beans.
Pressure on cocoa has intensified after prices pierced its long-term support at $2,200 per tonne earlier in the week, which triggered sell-stops.
"This is a technical breakdown which is getting a lot of stop-loss selling. There's nothing fundamentally that has changed for cocoa," said Spencer Patton, founder and chief investment officer of Steel Vine Investment in Chicago.
The most-active March cocoa futures on ICE fell $22, or 1 percent, to settle at $2,173 per tonne after earlier dipping to $2,166. That was the weakest level for the front month since July 17, 2012.
"It's a combination of the main crops seeming better than expected and mid crops looking good," said a European trader.
On charts, selling in chocolate's main ingredient appeared overdone - with a relative strength index (RSI) reading of 33, it was close to 30 which is considered oversold. Even so, its next technical support is not until $2,100, according to Patton.
May cocoa futures on Liffe fell 19 pounds, or 1.31 percent, to settle at 1,427 pounds a tonne.
Dealers noted the flow of cocoa for gradings on the Liffe exchange had picked up, contributing to a weakening of the market structure, with March trading at a 10-pound discount to May after briefly trading at a premium <LCC-1=R>.
Valid cocoa stocks in NYSE Liffe's nominated warehouses rose to 44,020 tonnes as of Jan. 21 from 43,020 tonnes on Jan. 7, exchange data showed.
Soft commodities were under pressure this week, with cash piling into equities and cotton. U.S. stocks were on track for their longest winning streak in more than eight year on solid corporate earnings and encouraging signs from the global economy.
Fiber, a smaller ICE market, rallied to seven-month highs on Thursday, rising 13 percent in just two weeks, as speculators bet on lower plantings and robust Chinese demand. Fiber volume was three times more than coffee and cocoa on Thursday.
SUGAR'S WORST WEEK SINCE OCTOBER
Raw sugar futures on ICE was heading for its worst weekly performance since October on producer selling ahead of a second consecutive bumper crop from top producer Brazil. Heavy trading volume was attributed to spread trading between March and May.
Dealers were bracing for the weekly CFTC Commitment of Traders report later on Friday which may show a further increase in the already-large speculative net short position.
"Technically, March (raws) is stuck in a range and we will see if there is any pre-emptive buying this afternoon in anticipation of the Commitment of Traders report," Nick Penney of brokerage Sucden Financial said in a market note.
March raw sugar futures on ICE were 0.05 cent or 0.27 percent lower at 18.45 cents a lb at 12:55 p.m. EDT (1755 GMT). The contract fell to 18.06 cents on Wednesday, the lowest level for the front-month since August 2010.
Dealers said lower prices had stimulated demand on the physical sugar market. "There has been some decent offtake this week," said a London-based broker.
March white sugar on Liffe fell $1.20 or 0.25 percent to $486.10 per tonne. The contract dipped to $480.80 on Wednesday, the lowest level for the front month since June 2010.
March arabica coffee futures on ICE rose 1.10 cents or 0.75 percent to $1.4765 per lb amid continued fears about the impact of the coffee tree disease, known as roya, in Central America, which accounts for fifth of global arabica output, and Mexico.
Guatemala could declare a national emergency early next month to fight the spread of the fungus while Honduras has cut its 2012/13 coffee production estimate by 13.6 percent.
Expectations for a record off-year crop in Brazil's biennial crop cycle were bearish for prices though, with the government crop supply agency Conab forecasting Brazil will grow 47 million to 50.2 million 60-kg bags of coffee in the 2013/14 harvest.
"Conab officials are confident that improved cultivation methods and the planting of new higher-yield coffee shrubs will erode the differences between high and low-yield years," said Commerzbank in a commodities note.
March robusta coffee futures settled up $13, or 0.66 percent, at $1,959 a tonne.
(Additional reporting by Nigel Hunt; editing by James Jukwey and Keiron Henderson)