MARKETS-SOFTS (UPDATE 3)
* Coffee surges on technical signals, fund buying
* Main shipper of Ivorian cocoa, Maersk, halts exports
* Raw sugar could soon test 30-year highs - dealers (Recasts, updated prices; adds second byline, dateline, previously LONDON)
By Marcy Nicholson and Anna Yukhananov
NEW YORK/LONDON, Jan 28 (Reuters) - Arabica coffee futures on ICE closed at a 13-1/2-year high on Friday after technical signals pointed upwards, while cocoa fell for the first time in 10 sessions and slipped from its recent one-year peak.
Sugar reversed to finish lower, with the raws sliding away from near 30-year peaks despite being underpinned by tight supplies.
Arabica coffee futures surged and broke out of a five-week sideways trend after two days of making higher lows and higher highs, showing the market had found a bottom and signaling technical dealers to get long, dealers said.
Fund purchases triggered automatic buy orders, dealers said.
ICE March arabicas soared 8.05 cents or 3.4 percent to close at $2.45 per lb, the highest settlement for the spot contract since June 1997. Liffe March robusta coffee finished the day up $39 at $2,129 per tonne.
"Coffee is a technical buy," said Jimmy Tintle, analyst with Transworld Futures in Florida.
Arabica coffee has been jostled recently by macroeconomic pressure, and a shortage of high-quality washed arabica beans from key producer Colombia and Central America.
The market will likely continue higher, with a target of around $2.60 to $2.70, although it will rally to those levels only if the wider commodity sector also rises, Tintle said.
Cocoa futures closed weaker, pulling the ICE market from Thursday's one-year top stemming from a call for an export ban in top grower Ivory Coast, which had ignited concerns about global supply.
Cocoa underwent a correction after rallying around 20 percent over the past three weeks, bolstered by a fierce political standoff in Ivory Coast after a Nov. 28 election, potentially threatening the supply pipeline.
ICE benchmark March cocoa futures dropped $81 or 2.4 percent to finish at $3,277 per tonne, closing the week up 2.9 percent. London May cocoa fell 37 pounds to settle at 2,143 pounds a tonne.
"There was a big threat of the one-month export ban, that gave it a bit of a bullish tilt for a while. I think a lot of that is starting to get priced in," said Bill Dixon, senior market strategist at MF Global Ltd's Lind-Waldock division in Chicago.
Still, dealers expect the market to return higher next week as the export ban and political uncertainty in Ivory Coast were supportive to prices.
In line with European Union restrictions, Danish shipping company Maersk, the main shipper of Ivorian beans to buyers in the United States and Asia, has halted cocoa exports from Ivory Coast and stopped taking new orders for imports to the country, a company official said.
SUGAR FLIRTS WITH 30-YEAR PEAK
Raw sugar futures retreated on mild profit-taking after nearly hitting a 30-year peak, but the overall outlook of the market is still bullish given tight supplies.
ICE March raw sugar fell 0.24 cent to settle at 33.94 cents per lb, having hit a session high at 34.51 cents. London March white sugar fell $10.10 to close at $814.40 per tonne.
Analysts said the prospect of Brazil churning out more ethanol than sugar in the upcoming season, the likelihood that India may not export as much sugar as initially thought, and sizable imports into Europe and most likely Russia should keep values supported going forward.
"I think overall the situation is still bullish," said Jack Scoville, senior analyst for brokers The Price Group in Chicago. "Sugar is in a consolidation day after the big rally this week."
For Friday's trade, investor sales deflated sugar but the market was well supported at session lows.
Dealers said ICE front-month sugar could soon test the 30-year high of 34.77 cents a lb, touched on Dec. 29.
"We're within striking distance of moving the high bar higher," said James Kirkup, head of sugar brokerage at ABN AMRO Markets (UK) Ltd.
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