SOFTS-ICE coffee, sugar post biggest losses this year amid selloff
* Arabica coffee off 5.8 pct as sell-stops triggered -analyst
* ICE coffee, raw sugar prices sink with Brazilian real
* Fed comments prompt broad commodities selloff
(Updates with closing prices)
NEW YORK/LONDON, June 20 (Reuters) - ICE arabica coffee tumbled to a near four-year low in its biggest loss since July and raw sugar futures dropped the most since October, under pressure from the weakening Brazilian real and a broad commodities and financial markets selloff.
ICE cocoa futures dropped to a two-month low, as world markets extended losses.
Both ICE arabica coffee and raw sugar futures posted their biggest daily losses this year as the tracked with the tumbling Brazilian real, dealers said.
That worsened losses seen amid a broad-based selloff.
Bonds, shares and commodities took a hit after news that the U.S. Federal Reserve would start winding down its stimulus package and data pointing to slower growth in China.
September arabica coffee futures on ICE Futures U.S. finished down 6 cents, or 4.8 percent, at $1.1835 cents per lb in the second month's biggest one-day loss since late July.
Earlier, it tumbled as much as 5.8 percent to $1.1710 per lb, the second month's weakest level since July 2009.
"We got pushed below support, and that's snowballed into further losses," said Art Liming, a futures strategist for Citigroup, pointing to sell-stop orders below the $1.22 per lb level.
The weaker Brazilian real encourages origin selling of dollar-traded commodities in the world's top grower of both sugar and arabica coffee, as it boosts local incomes from the sale.
Coffee prices have hit recent lows on expectations of bumper output in Brazil, the top arabica producer.
September robusta coffee futures on Liffe fell $59, or 3.3 percent, to close at $1,736 a tonne in the second-month contract's biggest down day since April.
The contract fell to $1,704 on Friday, the lowest level for the second month since October 2010.
"Arabica is dragging robusta with it," said a European trader, referring to the coming crop from top grower Brazil.
Dealers said the falling robusta prices would encourage roaster buying and lend support to the market.
July raw sugar on ICE plunged 0.59 cents, or 3.5 percent, to close at 16.38 cents per lb, the front-month contract's biggest daily drop since October.
Last week, it hit a near three-year low of 16.17 cents amid expectations of ample supplies from top producer Brazil.
"Commodities are trading lower on news from the Fed, and Brazil has become a concern, a bigger concern every day because of this battle against inflation," said Alex Oliveira, sugar trader for Newedge USA.
Better-than-expected monsoon rains in the world's second- largest producer India boosted production prospects which also weighed on the market.
A fire at an inland storage facility that services a major sugar exporting port in Brazil could impact delivery against the July contract, set to expire on June 28, ICE said on Wednesday.
The exchange's statement did not significantly boost the July/October spread on Thursday, as traders said that many knew of the fire and it was not expected to affect port operations.
Dealers attributed a bounce in prices that began on Friday to technically prompted short covering and said the market was returning to its bearish trend.
August white sugar on Liffe was down $7.70, or 1.6 percent, to finish at $488.10 a tonne, the front-month contract's biggest down day in two months.
September cocoa futures on ICE were down $59, or 2.7 percent, to finish at $2,157 a tonne, after falling to $2,152 per tonne, the weakest level since April.
Dealers said further losses were expected in the near term due to bearish fundamentals.
"The short to medium term outlook is we've got enough cocoa in the world, there's no particular climatic issues on the horizon and therefore the industry can take a relatively relaxed view which is likely to result in prices falling further than they have so far," said Jonathan Parkman, joint head of agriculture at brokerage Marex Spectron.
September cocoa on Liffe was down 17 pounds, or 1.2 percent, to finish at 1,431 pounds a tonne, after touching a more than two-month low of $1,429 per tonne.
(Editing by Phil Berlowitz and Marguerita Choy)