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SOFTS-ICE sugar steady, near 2-1/2-year low; arabicas flat

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Published: Wednesday, 3 Apr 2013 | 7:56 AM ET
By: David Brough

* Sugar specs reinstate short positions - Kingsman

* Plentiful coffee from previous Brazil crop-Licht

* W. Africa weather seen positive for crop development

(Updates throughout)

LONDON, April 3 (Reuters) - ICE raw sugar futures were steady on Wednesday, just above Tuesday's 2-1/2 year low, while arabica coffee was also stable, weighed by expectations of huge Brazilian crops.

ICE cocoa futures edged down slightly, pressured by ample West African April-to-September mid crop supplies.

May raw sugar futures edged down 0.02 cent or 0.1 percent to 17.57 cents a lb by 1119 GMT, just above Tuesday's 2-1/2 year low of 17.50 cents.

"Speculators are reinstating their short positions," said Jonathan Kingsman, head of agriculture at data and information provider Platts.

"Big crops in Thailand, India and Mexico, and the favourable weather in Brazil suggesting a good crop there: all of these factors suggest general bearishness."

Sugarcane mills are beginning to crush Brazil's main centre-south cane crop, estimated at a record 600 million tonnes, which dealers say is expected to keep a lid on sugar prices.

Logistics will be challenging for any Brazilian exporter over the next six months. Output will be 6 percent more than last year. A record soy crop will be 24 percent bigger, and exports of a record corn crop have doubled to more than 20 million tonnes over the past year.

May white sugar on Liffe was flat at $502.40 a tonne in thin volume of 1,561 lots.

ICE May arabica coffee futures were unchanged at $1.3615 per lb, and were not far from a 33-month low of $1.3405, touched on March 18, basis second month.

FAVOURABLE COFFEE WEATHER

Mostly favourable weather in Brazil continued to weigh on the market as this boosted supply expectations for a record off-year harvest in its biennial production cycle, which is seen keeping the market well supplied after bumper output in 2012/13.

"The big Brazilian crop will start soon, and there is still plenty of coffee from last year's crop," said Stefan Uhlenbrock, soft commodities analyst with F.O. Licht in Germany.

Liffe July robusta coffee futures fell $17, or 0.8 percent, to $2,041 a tonne in moderate turnover of 4,829 lots.

Robusta coffee supply from Vietnam could become tight this month after a jump in March loading, with traders on Tuesday projecting shipments to range widely, from 100,000 tonnes to 190,000 tonnes.

Liffe July cocoa futures eased 11 pounds or 0.7 percent to 1,471 pounds a tonne in thin volume of 2,034 lots.

Cocoa prices felt pressure from forward sales as West African producers looked to sell into any rallies and from good supply prospects for the mid-crop, dealers said.

"The weather over West Africa continues to combine heavy rains with high temperatures which is positive for crop development," said Eric Sivry, head of agri options brokerage at Marex Spectron.

May cocoa on ICE was down $17 or 0.8 percent at $2,154 a tonne.

Ghana's cocoa purchases reached 601,303.7 tonnes by March 21 since the season started on Oct. 12, down 15.9 percent compared with the same period last year, data from industry regulator Cocobod showed on Tuesday.

(Editing by James Jukwey)

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*Plentiful coffee from previous Brazil crop-Licht. May raw sugar futures edged down 0.02 cent or 0.1 percent to 17.57 cents a lb by 1119 GMT, just above Tuesday's 2-1/ 2 year low of 17.50 cents. "Big crops in Thailand, India and Mexico, and the favourable weather in Brazil suggesting a good crop there: all of these factors suggest general bearishness."

   
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