SOFTS-ICE coffee, sugar up from 2-1/2-year lows, cocoa declines
* Arabica rebounds from Aug 2010 low on short-covering
* Raw sugar gains seen capped by Brazilian supply
* Abundant W. Africa cocoa mid crops expected
(New throughout, updates prices; adds NEW YORK dateline, byline)
NEW YORK/LONDON, Feb 20 (Reuters) - ICE coffee and raw sugar futures rebounded on Wednesday from lows hit in the past week, as short-covering lifted prices and outweighed expectations that hefty supplies from top producer Brazil will outstrip demand.
ICE cocoa slid, pressured by expectations for large West African mid crops.
May arabica coffee futures on ICE rose 2.5 cent, or 1.8 percent, to $1.409 per lb at 12:39 p.m. EST (1739 GMT), recovering from a more than 2-1/2 year low of $1.3760 per lb struck on Tuesday.
Prices were supported by short-covering and by renewed concerns over the tree-killing fungus roya, after Central American agriculture ministers said the spread of the rust fungus was expected to cost the region's coffee industry roughly half a billion dollars in the current 2012/13 harvesting season.
"I can see a great deal of short-covering in the coffee market. News in regards to the extent of possible damage from coffee rust has some taking their profits," said Hector Galvan, senior market strategist for RJO Futures in Chicago.
Speculators have taken a record short position in the ICE arabica market.
Trading volumes were heavy, with more than 42,000 lots traded before the market settled, compared with a 30-day average of under 23,000, preliminary Thomson Reuters data showed.
Producers took the rising prices as opportunity to sell.
"Any sort of positive reaction in the arabicas market elicits producer selling," said Keith Flury, a senior soft commodities analyst with Rabobank.
Still, gains were seen as limited, thanks to hefty global supplies, particularly from Brazil.
May robusta coffee futures on Liffe rose $21, or 1 percent, to $2,063 a tonne.
ICE sugar futures saw similar dynamics as short-covering lifted prices for a second day but ample Brazilian supplies slowed the upward momentum.
"The market remains range-bound, but the lows are slowly getting lower, and any rallies are short-covering in nature," said James Kirkup, head of sugar brokerage at ABN AMRO Markets.
March raw sugar futures on ICE reversed early losses and traded up 0.13 cent, or 0.7 percent, at 18.35 cents per lb, after hitting 17.87 cents a lb on Thursday, its lowest level since August 2010.
The most-active May contracted climbed 0.14 cent, or 0.7 percent, to 18.36 cents a lb.
Speculators raised their net short positions in raw sugar and coffee contracts on ICE Futures U.S. to record highs in the week to Feb. 12, increasing their bearish stance in markets abundant in supplies, U.S. Commodity Futures Trading Commission data showed on Friday.
"It's a battle. The funds are pressuring the price, forcing the trade to sell. The question becomes does the trade hold off for any reason?" said Michael McDougall, senior vice president at Newedge USA.
Trading was heavy, at more than 102,000 contracts, compared with a 30-day average of less than 89,000, according to preliminary Thomson Reuters data.
Heavy sugar supply prospects have kept prices under pressure, with an improving crop outlook for top producer Brazil.
May white sugar on Liffe rose $5.00, or 1 percent, to $500.60 a tonne.
Cocoa dealers said production from the West African mid-crop could reach an all-time high due to favorable weather conditions.
"Prices are still responding not only to a possibly strong mid crop, but expectations that forward selling will continue. One of the catalysts that lunged prices lower was the forward selling of Cocoa that started in December," RJO Futures' Galvan said.
May cocoa futures on ICE slid $6, or 0.3 percent, to close at $2,113 per tonne, after earlier sinking to $2,105 per tonne, the lowest price since June 2012.
Cameroon's cocoa exports rose almost 15 percent in the five months to the end of January, compared with the same period last season, National Cocoa and Coffee Board statistics showed on Tuesday.
May cocoa on Liffe inched up 5 pounds, or 0.4 percent, to finish at 1,413 pounds a tonne, above Tuesday's 10-month low of 1,403 pounds.
(Reporting by Chris Prentice; Editing by Marguerita Choy)