(Rewrites throughout, updates prices; adds comment, NEW YORK dateline) NEW YORK/LONDON, Feb 22 (Reuters) - Cocoa futures on ICE turned lower on Thursday after the New York market tapped a three-month high and London prices failed to breach the prior session's peak on chart-based selling, while arabica coffee rebounded from a two-month low.
* May New York cocoa settled down $27, or 1.2 percent, at $2,146 per tonne, after rising to $2,177, the highest level for the second-position contract since Nov. 14.
* May London cocoa settled down 12 pounds, or 0.8 percent, at 1,526 pounds per tonne, after rising to 1,543 pounds, matching the prior session's 2-1/2-month high.
* The markets' failure to extend gains further combined with reaching technically overbought levels on the 14-day relative strength indexes triggered chart-based selling and profit-taking, traders said.
* The market has been supported recently by dry weather in top grower Ivory Coast although some suggested it was not yet a major concern for the upcoming April-to-September mid-crop.
* "So far, I don't see any problems as such and I don't really trust the recent strength in the market," one dealer said, adding that soil moisture levels had been good entering the dry season and there had also been sporadic rains recently.
* Cocoa exporters and pod counters in Ivory Coast have revised down their forecast for this year's main harvest because of hot weather and a lack of rain.
* May arabica coffee settled up 2 cents, or 1.7 percent, at $1.209 per lb, its first rise in five sessions after falling earlier in the day to $1.1855, the lowest level since Dec. 12.
* Prices rallied on short-covering after ICE data showed total open interest surged by 7,519 contracts to 230,077 contracts on Wednesday.
* "People are bottom-picking. It's time to try to shake out some of these weak shorts," one U.S. trader said.
* Rabobank in a report slightly reduced its 2018/19 coffee production forecast in top grower Brazil to 57 million to 59 million bags, compared with a prior estimate of 59 million bags.
* May robusta coffee settled down $7, or 0.4 percent, at $1,759 per tonne.
* May raw sugar settled up 0.31 cent, or 2.3 percent, at 13.58 cents per lb.
* The rally lifted the March premium over May <SBH8-K8> to 0.13 cent, with some dealers pointing to short-term supply tightness.
* Others, however, maintained there will be ample supplies.
* May white sugar settled up $6.20, or 1.7 percent, at $362.90 per tonne.
(Reporting by Marcy Nicholson in New York and Nigel Hunt in London; Editing by David Evans and Paul Simao)