SOFTS-Cocoa hits multi-month lows, producer sales awaited
* Cocoa market capped by expected pick-up in origin sales
* Large Brazil coffee crop may offset CentAm shortfall
* Sugar upside likely capped by surplus global supplies
(Adds quote, updates prices)
LONDON, March 6 (Reuters) - Cocoa futures hit multi-month lows on Wednesday with the market weighed by an improving outlook for West Africa mid-crop and the prospect of significant selling by key producers in coming weeks, dealers said.
Arabica coffee on ICE was slightly lower, extending the prior session's steep losses, while raw sugar was little changed as excess supplies kept a lid on both markets.
May cocoa on ICE was off $15 or 0.7 percent at $2,044 per tonne at 1528 GMT after dipping to $2,040, the lowest level for the second month since June 2012.
Dealers said top producers Ivory Coast and Ghana were both out of the market at the moment but are likely to need to sell in the next few weeks, limiting the scope for rallies.
"The longer origin are not in the market, the more bearish it gets," one London broker said. "Any rally will be well sold into with specs front running origin selling."
Dealers said the weakness of the front month spread of Liffe, an indication that overall supplies are ample despite relatively low certified stocks, had contributed to the bearish mood in the market.
An improved mid-crop outlook in West Africa has also put downward pressure on prices.
"You've got a mid-crop that is looking better than a few months ago. Survival rates are good and we've got rain returning," one broker said.
Dealers said the weakness of sterling helped to limit losses on Liffe with May off 1 pound or 0.1 percent at 1,390 pounds a tonne after earlier touching 1,382 pounds, the lowest level for the second month since April 2012.
LEAF RUST OUTBREAK
Arabica coffee futures on ICE were lower with the market remaining on the defensive after a steep fall of around four percent on Tuesday.
ICE May arabica coffee was off 0.85 cents or 0.6 percent at $1.4030 per lb, with the market heading back down towards a 32-month low of $1.3760 hit on Feb. 19.
Dealers said a favourable crop outlook in top producer Brazil had added to the bearish mood in a market which already appears oversupplied despite ongoing concerns about a severe outbreak of roya, or leaf rust in Central America and Mexico.
"There is a lot of supply around so I would expect the (downward) pressure to persist and prices could even fall below current values," F.O. Licht analyst Stefan Uhlenbrock said.
Uhlenbrock said the prospect of a possibly record "off-year" crop in Brazil this year should ensure adequate supplies.
"There is not a real threat that these problems in Central America will strain global coffee supply significantly," he said.
New York May coffee may keep falling to $1.3775 per lb, as indicted by its wave pattern and a Fibonacci projection analysis, according to Reuters market analyst Wang Tao.
Robusta coffee prices were little changed with the market underpinned by the rising demand for instant or soluble coffee, in emerging markets. Robustas are widely used in instant coffee.
May robusta coffee futures on Liffe rose $3 or 0.1 percent to $2,092 a tonne.
Raw sugar futures on ICE were little changed with May off a marginal 0.04 cent or 0.2 percent at 18.15 cents a lb.
Dealers said there were signs that the rebound from last week's low had run out of steam. The front month slid last week to 17.61 cents, the lowest level since August 2010.
"There is no reason why the market should climb to significantly higher levels because there is so much sugar around and Brazil is also poised to producer a bigger crop in 2013/14," Uhlenbrock said.
May white sugar on Liffe was up $0.20 or 0.04 percent to $516.90 a tonne.
(Reporting by Nigel Hunt; editing by William Hardy)