SOFTS-Robusta coffee falls after surging, raw sugar consolidates
* Speculators cut net short position in ICE raw sugar
* Soft commodities down along with commodity complex
* Industry buying prevents steeper losses in Liffe cocoa
(New throughout, updates prices; adds second byline/dateline, analyst comment)
NEW YORK/LONDON, Feb 4 (Reuters) - Robusta coffee futures on Liffe turned lower after surging to the highest level in more than three months on Monday as buying on supply concerns dried up, while raw sugar on ICE consolidated after reaching a three-week high.
Arabica coffee futures on ICE fell to a one-month low, dropping along with the commodity complex, while cocoa prices edged lower.
The softs complex was down across the board as the Thomson Reuters-Jefferies CRB index, a global benchmark for commodities made up of 19 markets, was down about 1 percent. The complex dropped along with major stock markets as investors booked profits on recent strong gains.
Robusta coffee futures on Liffe jumped for the third straight session, climbing more than 5 percent to the highest levels in more than three months before falling back.
May robustas were down $8, or 0.4 percent, at $2,047 a tonne after peaking at $2,074 by 12:31 p.m. EST (1731 GMT), the highest level for the second month since Oct. 22, 2012.
"Demand for robusta's very strong," said Shawn Hackett of Hackett Financial Advisors in Florida, adding that some dealers are concerned about future supplies as the world's biggest producer, Vietnam, has put a halt to increasing farm acreage.
"Twenty-five percent of the trees are beyond their productive life and we'll have to go through another rejuvenation cycle at a time of constrained acreage," Hackett said.
The market was boosted last week by the rebalancing of the Rogers International Commodity index with Liffe robustas added at the expense of ICE arabicas.
The robusta rally narrowed its discount to ICE arabica futures to around 52 cents per lb, the lowest in 1-1/2 months.
March arabica coffee futures on ICE were down 3.75 cents, or 2.5 percent, at $1.4420 per lb, weighed on partly by a firmer dollar.
Dealers said that based on historical price charts the technical outlook was bearish with potential for further losses.
"The market is weak, it's gone back into the range it's been trading since December," said a London-based broker.
RAW SUGAR CONSOLIDATES
March raw sugar futures on ICE slid 0.09 cent, or 0.5 percent, to 18.80 cents a lb. The front month had dipped to 18.06 cents on Jan. 23, its lowest level since August 2010.
Total open interest inched up 686 contracts to 835,969 contracts on Feb. 1, the highest since February 2010.
"It's saying that people are getting interested in sugar again. Money wants to play this market again," Hackett said about the climbing open interest.
"The fact that more and more people are getting interested in the market is usually a sign we're getting close to a turning point in the sugar market, but we're not there yet."
The market has been on a prolonged downtrend driven by the prospect of a third consecutive global surplus in 2012/13.
"Near term we see the potential for some support returning to sugar despite the headwinds created by the large harvest," Ole Hansen, head of commodity strategy at Saxo Bank, said in a research note on Monday.
Hansen said the market was boosted by constructive chart formations and last week's decision by the Brazilian government to allow the ethanol content in gasoline to rise, starting on May 1.
Dealers said the market's improved performance had prompted some speculators to trim a huge net short position.
Speculators cut their net short position in raw sugar contracts on ICE Futures U.S., in the week to Jan. 29, U.S. Commodity Futures Trading Commission data showed on Friday.
March white sugar on Liffe fell $2.90, or 0.6 percent, to $499.60 a tonne.
Cocoa futures were lower with March futures on ICE settled down $13, or 0.6 percent, at $2,192 a tonne.
Volumes have been boosted by heavy activity on the March/May spread <CC-1=R> at around level money.
May cocoa on Liffe finished down 10 pounds, or 0.7 percent, at 1,434 pounds a tonne.
"Industry buying is supporting London. If the industry suddenly decide they've got enough cover that could then put the market under pressure," said a British-based broker.
(Additional reporting by Sarah McFarlane in London; editing by Anthony Barker, Keiron Henderson and; Peter Galloway)