* Sugar drops over 4 percent to two-week low
* Arabica prices plunge, still notch 7th straight weekly gain
* Small delivery seen against London cocoa expiry
(New throughout, updates prices; adds byline, NEW YORK dateline)
NEW YORK/LONDON, March 14 (Reuters) - ICE raw sugar futures fell more than 4 percent to a two-week low on Friday as traders liquidated long positions on signs that a recent rally triggered by weather worries in top grower Brazil may have been overdone.
Arabica coffee on ICE Futures U.S. also dropped sharply as investors booked profits, but eked out a seventh straight weekly gain.
London cocoa futures edged up in gyrations ahead of Friday's March contract expiry.
In raw sugar, the front-month May ICE contract finished the day down 0.57 cent, or 3.2 percent, at 17.25 cents a lb and notched a weekly loss after dropping over 4 percent to a near two-week low of 17.07 cents.
Rains and an early start to cane crushing in Brazil have cast doubts over the merit of a weather-driven rally that has lifted sugar prices 17 percent from late January's 3-1/2-year low of 14.70 cents a lb.
The dry weather was expected to cause harvest delays in the world's top exporter, but struggling mills have begun the April-March crushing season early to generate cash.
"We went up too far and too fast during a period we didn't have solid information about the impact on the crop here," said Bruno Lima of INTL FCStone in Brazil.
Drops past key technical support triggered waves of selling and big volumes as speculators exited their positions. The non-commercial dealers reversed a big bearish stance to a net long position in raw sugar futures and options in recent weeks.
Brokers said that the climb above 18 cents to last week's four-month peak of 18.47 has also stoked producer selling.
Further, the global market remains under pressure from subdued demand and available supplies. Indian millers, for example, have boosted raw-sugar exports to the world market, aided by government incentives.
Liffe May white sugar futures finished down $6.60, or 1.4 percent, at $457.10 per tonne.
Second-month May arabica coffee futures on ICE dropped 7.55 cents, or 3.7 percent, to settle at $1.984 per lb, toppling further from this week's two-year peak of $2.0975.
Even so, the benchmark second-month marked its biggest seven-week rally since 1994. Prices have surged almost 80 percent year-to-date due to concerns over the impact of the unseasonably dry weather on Brazil's crops.
"People are ringing the register," Nick Gentile, senior partner of commodity trading consultancy Atlantic Capital Partners, said of the day's profit-taking.
Robusta May coffee futures on Liffe fell $14, or 0.6 percent, to close at $2,175 a tonne. The second position hit a 17-month high of $2,218 on Wednesday.
In cocoa, the May contract on Liffe edged up 3 pounds, or 0.2 percent, to finish at 1,878 pounds a tonne, after hitting 1,893 pounds, a May contract high and the second-month's strongest level in 2-1/2 years.
Traders said small open interest signalled a modest-sized delivery against the London March cocoa contract, which closed up $17, or 0.9, at 1,888 and hit a contract high of 1,896 per tonne in its final day of trade.
The front-month jumped to a premium above the second-month on Friday from a discount previously, taken as evidence of last-minute demand for the delivery.
Profit-taking pressured second-month May cocoa futures on ICE $14, or 0.5 percent lower, to settle at $2,992 a tonne paring gains that lifted the contract to a 2-1/2-year high of $3,027 reached on Tuesday amid worries of a global supply deficit.
(Editing by Jane Baird, Stephen Powell and Tom Brown)