* Currency-related dealings weigh on New York cocoa
* Speculator buying buoys arabica despite rain forecasts
* Sugar futures underpinned by expectations of reduced supplies
(Updates with closing prices; adds byline, NEW YORK dateline)
NEW YORK/LONDON, March 18 (Reuters) - ICE cocoa eased from Monday's 2-1/2-year high on profit-taking, while arabica coffee edged higher on renewed speculator buying and lingering worry over the extent of drought damage to crops in top grower Brazil.
Raw sugar on ICE Futures U.S. inched higher on Tuesday after choppy trading, pinned between subdued demand and mounting expectations of reduced supplies.
Trading volumes were below average across the softs markets, preliminary Thomson Reuters data showed.
The weather-driven rally that has propelled coffee prices 70 percent higher so far this year has lost momentum in recent sessions on an improved outlook for much-needed rain in Brazil.
Forecasters on Tuesday predicted an increasing likelihood of wet weather across the country's key growing regions.
Benchmark May arabica coffee futures on ICE edged up 0.15 cent, or 0.08 percent, to close at $1.9155 per lb, after touching a two-year peak of $2.0975 last week.
"Coffee is up on light speculator buying after yesterday's selloff," said Hector Galvan, senior softs broker at RJO Futures in Chicago. "People are waiting to see any big changes in the weather."
May robusta coffee futures dropped $24, or 1.1 percent, to close at $2,135 a tonne, sliding further from last week's 17-month high of $2,218.
In cocoa, May ICE futures slipped $16, or 0.5 percent, to settle at $3,014. Front-month prices hit a 2-1/2-year high of $3,039 on Monday.
"We can't push above yesterday's high, and so we're seeing some profit-taking," said RJO's Galvan.
Cocoa prices have soared on expectations of a second straight deficit year, bolstered in recent weeks by the growing likelihood of an El Nino weather event that could tighten world supplies.
Even so, demand for mid-crop beans from exporters in top grower Ivory Coast is expected to be weak as shippers said high stocks would prevent them from buying.
July cocoa futures on Liffe ended unchanged at 1,893 pounds a tonne after currency-related buying helped lift prices to a contract high of 1,896, the strongest level for the second-month since September 2011.
The British pound eased against the U.S. dollar, making cocoa traded in London less expensive than its New York counterpart.
The benchmark May ICE contract edged up 0.09 cent, or 0.5 percent, to finish at 17.14 cents a lb.
The front-month ICE raw sugar contract hit a four-month peak of 18.47 cents hit earlier this month as dry weather in Brazil stoked expectations of reduced supplies in the world's top producer.
"Current weather concerns and their potential to dent production in 2014/15 reinforce our view that price risks" are to the upside, said analyst Abah Ofon of Standard Chartered in a market note.
While expectations of reduced Brazilian supplies have mounted, the price rally has met resistance as demand has been subdued and ample stocks are expected to offset production losses in the top producer.
"On the one side, you have concerns about Brazilian production, but on the other, there are Thai and Indian supplies," said Jack Scoville, a vice president for Price Futures Group in Chicago.
Liffe May white sugar futures finished up $2.60, or 0.6 percent, at $456.10 per tonne.
(Editing by Anthony Barker, Jason Neely and Lisa Von Ahn)