SOFTS-Robusta coffee hits 3-year low on hefty supply outlook
* Vietnam 2013/14 coffee output forecast rising to 29 m bags
* Cocoa technical up-trend seen remaining intact
* ICE and Liffe cocoa markets remain in backwardation
(Updates closing coffee/sugar prices, recasts to include ICE cocoa 2-year high)
NEW YORK/LONDON, Oct 22 (Reuters) - Robusta coffee futures on Liffe hit a three-year low for the second straight day on Tuesday, ahead of an expected record crop from top grower Vietnam, which dealers say may create a global surplus.
Cocoa trading on ICE Futures U.S. market climbed to a two-year high late in the session on support from the strong British pound. ICE arabica coffee inched down, moving closer towards last month's four-year low as abundant supplies kept the tone bearish.
Raw sugar futures were steady, consolidating after last week's rally and following the latest harvest update that came in line with expectations. All of the soft commodities traded in thin volume.
Liffe January robusta coffee settled down $6, or 0.4 percent, at $1,579 a tonne, having earlier dipped to $1,574, the lowest since September 2010, pressured by Vietnam's harvest.
One international trade house forecast Vietnam's 2013/14 crop at a record 29 million 60-kg bags, up from 25 million bags the previous year. A July Reuters poll of 32 analysts forecast a median estimate at 25 million bags, with projections ranging from 17 million to 29.5 million bags.
"We still see some of last year's crop in the hands of farmers or middle men, waiting for better prices," said a trader at the international trade house, estimating between 10 and 15 percent of the crop remained.
Delayed selling combined with speculators trading the November/January spread <LRC-1=R> lifted November's premium to January to around $28, the widest in two months, dealers said.
"You've seen the speculators buying the spread, which drove the switch to the premium," said one U.S. dealer, referring to the November/January spread.
"The Vietnam and Indonesia premiums are still very high above the board and that reflects the fact that the dealers (there) are short."
Harvest of Vietnam's crop is underway and is expected to be in full flow next month, with abundant supplies likely to be available in December and January.
December arabica coffee futures on ICE edged down 0.75 cent, or 0.7 percent, to close at $1.1195 per lb, near September's more than four-year low of $1.1105.
COCOA MARKETS REMAIN INVERTED
ICE December cocoa finished up $39, or 1.4 percent, at $2,769 a tonne, and later peaked in post-settlement dealings at $2,780, the highest for the spot contract since September 2011. The contract remained at a small premium to March, widening to around $5 from $3 on Monday.
Total open interest continued to rise, climbing by more than 2,000 lots to 223,243 lots on Oct. 21, the highest since May 23, exchange data showed.
A tightening global cocoa market have supported higher prices with a second consecutive global deficit expected in 2013/14. Hefty bean arrivals in the world's biggest producer Ivory Coast are preventing steeper gains, dealers said.
London March cocoa settled up 19 pounds, or 1.1 percent, at 1,744 pounds per tonne. The spot contract's premium to March <LCC-1=R> continued to narrow, reaching 6 pounds, versus 9 pounds on Monday and 26 pounds in late September.
"Ultimately it is going to break higher with the long term technical picture firmly constructive," a U.K.-based broker said.
In sugar, ICE March futures finished up 0.03 cent, or 0.2 percent, at 19.45 cents per lb, consolidating after Friday's 6 percent surge to a one-year high of 20.16 cents on news of a fire at major warehouses in top producer Brazil.
Sugar output from mills in Brazil's center-south plunged 15 percent in the first two weeks of October from the last two weeks of September, industry association Unica said post-market on Monday.
Kona Haque, analyst at Macquarie Bank said, "Brazil's cane crush has peaked, and incremental sugar output will fall from now until the intercrop due to wetter than average weather forecasts."
December white sugar on Liffe closed up $1.90, or 0.4 percent, at $513.80 a tonne.
(Additional reporting by Freya Berry in London; Editing by Keiron Henderson, Bob Burgdorfer and Marguerita Choy)