SOFTS-Cocoa hits 2-1/2 year high on weather concerns; sugar soars

* Potential El Nino weather pattern could curb cocoa output

* Liffe white sugar soars ahead of contract expiry

* India sets sugar support at 3,333 rupees/tonne

(New throughout, updates prices; adds byline, NEW YORK dateline)

NEW YORK/LONDON, Feb 12 (Reuters) - Cocoa futures in New York and London hit 2-1/2-year highs on Wednesday on worries that potential El Nino weather conditions could curb global cocoa output, while raw sugar prices rallied the most in almost two weeks on short-covering.

Arabica coffee on ICE Futures U.S. advanced in heavy spreading and options-related trade.

The May cocoa contract on Liffe closed up 13 pounds, or 0.7 percent, at 1,867 pounds a tonne after hitting 1,871 pounds, a May contract high and the strongest level for the second-month since September 2011.

May cocoa on ICE gained $43, or 1.3 percent, to settle at $2,971 a tonne, after hitting a 2-1/2 year high of $2,974.

Dealers said the market was supported by a possibility that El Nino weather could impact future supply.

"During El Nino years, global production is lower than it would otherwise be," said Jonathan Parkman, joint head of agriculture at brokerage Marex Spectron, who said early El Nino conditions could affect both the current 2013/14 crop and the following.

Earlier this month, both the Australian weather bureau and the U .S. weather forecaster Climate Prediction Center (CPC) said there was an increasing chance of an El Nino weather pattern emerging later this year.

El Nino can cause flooding and heavy rains in the United States and South America and can trigger drought conditions in Southeast Asia and Australia.

Analysts say its effect on cocoa producing countries varies on each occasion but the overall impact is negative.


ICE March raw sugar futures jumped 0.42 cent, or 2.7 percent, to 15.88 cents per lb by 12:42 p.m. EST (1742 GMT), poised for its sharpest gain this month after India's government agreed to give millers a subsidy for raw-sugar production.

The 3,333 rupee-per-tonne ($53.52-per-tonne) subsidy will likely boost exports from India, and expectations of it pressured prices to a 3-1/2-year low of 14.70 cents at the end of January, traders said.

Even so, prices rallied on short covering after the news has been widely anticipated by the market.

The short-covering following the news was a case of "sell the rumor, buy the fact," said Michael McDougall, a senior vice president for Newedge USA in New York.

March white sugar futures on Liffe soared $14.80, or 3.4 percent, to settle at $453.60 per tonne in dealings ahead of Thursday's expiry.

The spot contract's premium above the second month <LSU-1=R> spiked as high as $8.80 a tonne, its highest since October, after largely trading at a discount for the past four months.

Traders expect a moderate delivery of Brazilian and Central American supplies against the March contract.

Cane crushing in the world's top producer wound down last month, leaving Brazil's main center-south region cumulative sugar output for the season largely unchanged at 34.3 million tonnes at the end of January, biweekly data from cane industry association Unica showed on Wednesday.

May arabica coffee futures on ICE climbed 2.95 cents, or 2.1 percent, to $1.4240 per lb.

Traders were covering short positions ahead of the options expiry, said Hector Galvan, senior softs broker at RJO Futures in Chicago.

Prices were also supported by worry that dry conditions in Brazil have hurt crops in the top grower. Short-covering because of the dry conditions shot the second-month to last week's nine-month high of $1.4610 per lb.

Liffe May robusta coffee gained $8, or 0.4 percent, to settle at $1,818 a tonne.

(Editing by Anthony Barker and Marguerita Choy)