(Rewrites throughout, updates prices; adds comment, NEW YORK dateline) NEW YORK/LONDON, Feb 16 (Reuters) - Arabica coffee futures on ICE fell 3 percent to a two-month low on Friday, on selling ahead of the spot contract's first notice day and technical weakness after prices broke below support levels. U.S. soft commodity markets will be closed on Monday for a holiday.
* May arabica coffee settled down 3.7 cent, or 3 percent, at $1.2045 per lb, after falling to a two-month low at $1.202.
* Prices were pressured by selling ahead of the March
contract's first notice day on Tuesday, traders said. * Chart-based sell signals were triggered after prices
failed to hold above $1.235, a previous support level, and again around $1.21, traders said.
* Futures prices shrugged off tightening supplies of Colombian coffee, as shipments run late and U.S. inventories fall, lifting their premium on the physical market after poor crop weather hurt output in the world's biggest grower of high-quality arabica beans.
* "The coffee supply situation is tighter than the low price level would suggest," Commerzbank said, noting U.S. stocks of certified coffee from Colombia on the ICE have plunged by a third within a month.
* May robusta coffee settled down $29, or 1.6 percent, at $1,754 per tonne.
* May New York cocoa closed flat at $2,134 a tonne after rising to a three-month high at $2,157. For the week, however, it closed up 3.6 percent, the second position's sixth weekly rise in the past seven weeks.
* The U.S. market was pressured by the a drop in the British
pound against the dollar on Friday. This was in contrast
to the rally in the sterling that took place during most of the week, which then provided support to New York cocoa prices, traders said.
* May London cocoa settled up 6 pounds, or 0.4 percent, at 1,507 pounds per tonne.
* May raw sugar settled down 0.23 cent, or 1.7 percent, at 13.28 cents per lb.
* The March contract held its premium over May around 0.1 cent, in part supported by funds rolling forward their short positions out of the front month, traders said.
* There also may be some short-term supply tightness despite an overall global surplus for the season, traders said.
* "More in the market seem content that the immediate danger from surplus sugar has been pushed out later in 2018. And pricing certainly suggests that is the case," said Commonwealth Bank of Australia analyst Tobin Gorey in a market note.
* May white sugar settled down $4.30, or 1.2 percent, at $356.80 per tonne.
(Reporting by Marcy Nicholson in New York and Nigel Hunt in London; editing by Adrian Croft, Susan Fenton and Susan Thomas)