SOFTS-Sugar, coffee and cocoa slip along with other commodities
* Sugar retreats after failing to breach key resistance
* Arabica coffee market weighed by surplus supplies
* March/May spreading boosts ICE cocoa volume
(New throughout, updates prices; adds second byline/dateline, trade comment)
NEW YORK/LONDON, Feb 6 (Reuters) - Sugar, coffee and cocoa markets trading in both New York and London eased on Wednesday, with abundant supplies pressuring sugar and arabica, while cocoa followed lower trend in other commodities, with position rolling on ICE boosting volume.
The Thomson Reuters-Jefferies CRB index, a global benchmark for commodities made up of 19 markets, dropped nearly 2 percent before paring losses. The U.S. dollar climbed against a basket of six major currencies.
The strong greenback can attract sellers holding other currencies.
"The macro put the charts on the defensive here today, coffee, cocoa and sugar. It took the wind out of their sails," said one U.S. softs dealers.
European equities sank to two-month lows after a run of weak corporate earnings and signs of disagreement between Germany and France over the exchange rate for the euro EUR= dented sentiment.
Raw sugar futures on ICE dropped for the third straight day, moving closer to last month's 2-1/2-year low at 18.06 cents per lb, basis the spot contract. The contract extended its losses after open interest rose to a three-year high exceeding 841,000 contracts in the previous session in a falling market.
March raw sugar futures on ICE were down 0.30 cent, or 1.6 percent, at 18.26 cents a lb by 12:44 p.m. EST (1744 GMT).
"Last week's short-covering rally appears to have run out of steam, with the consecutive failed attempts at the 50-day moving average," Luke Mathews, a commodities strategist at the Commonwealth Bank of Australia, said in a note on Wednesday.
The 50-day moving average on the March contract dipped just below 19 cents a lb this week.
The market is struggling with excess supplies, and a third successive global sugar surplus widely forecast for the 2012/13 season. Many sugar traders at a major conference in Dubai this week expected the market to resume its overall downward trend in the near future.
"We would rate the fundamentals as very challenging for sugar. We have an oversupply, and this is the third year in a row (of a global supply surplus)," Tobias Merath, global head of commodity research at Credit Suisse said.
March white sugar on Liffe fell $2.70, or 0.5 percent, to $494.10 a tonne.
ROBUSTA FALLS FROM FIBONACCI LEVEL
Robusta coffee futures on Liffe were weak for most of the session, after soaring to the highest intraday level in more than three months on strong demand on Tuesday.
The March contract hit resistance at $2,085 per tonne on Tuesday, the 61.8 percent Fibonacci retracement level.
(Graphic on robusta: http://link.reuters.com/duq75t)
May robusta coffee futures on Liffe inched up $1 to settle at $2,072 a tonne, turning up a shade in late dealings. The contract climbed to a peak of $2,088 on Tuesday, the highest level for the benchmark second month since Oct. 22, 2012.
Arabica coffee futures on ICE were lower as the market also struggled to absorb surplus supplies. Position rolling out of the March contract, ahead of first notice day on Feb. 20, into May, boosted volume, dealers said.
"It is a similar situation (to sugar). This is definitely a market that is very well supplied," Merath of Credit Suisse said, adding that demand in the key European market was lackluster due to the region's economic situation.
March arabica coffee futures on ICE fell 2.00 cents, or 1.4 percent, to $1.4205 per lb.
"Roasters are fairly well covered so they're not in a hurry to buy," said a London-based broker.
"If the market goes below the December low of $1.4125 there could be some scale down buying," the broker said, referring to the front month.
Cocoa futures on ICE were also lower, with the market giving back some of the prior session's steep gain, which was linked to technical buying and supply concerns due partly to drier weather in top grower Ivory Coast. March/May spreading lifted volume ahead of the spot contract's first notice day Feb. 14.
March futures on ICE fell $23, or 1 percent, to close at $2,223 a tonne.
"At around $2,200 to $2,300 we would argue it is close to fair value. There is obviously some daily volatility but this really looks like a sideways market," Merath said.
May cocoa on Liffe fell 10 pounds, or 0.7 percent, to finish at 1,458 pounds a tonne.
(Additional reporting by Sarah McFarlane in London; Editing by Jane Baird, Keiron Henderson and Bob Burgdorfer)