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SOFTS-Cocoa pulls back from six-week highs; arabica coffee climbs

(Recasts with updated prices, comments; adds NEW YORK to dateline) NEW YORK/LONDON, Dec 20 (Reuters) - Cocoa futures on ICE fell on Thursday, erasing the prior session's gains when they hit six-week highs, while the Brazilian real boosted arabica coffee prices and lower oil prices pressured raw sugar. COCOA * March New York cocoa settled down $46, or 2 percent, at $2,271 per tonne, after rising 2 percent in the previous session. * "We need to close above $2,290 for a couple more days to get convinced that the trend in cocoa has changed," one U.S. trader said. The $2,290 level represents a 62 percent Fibonacci retracement in the March contract from the Nov. 7 high of $2,410 to the Dec. 5 low of $2,095, the trader noted. * March London cocoa settled down 24 pounds, or 1.4 percent, at 1,685 pounds per tonne as the pound strengthened. * "With the thin trading conditions, moves in cocoa have certainly been more magnified than is perhaps justified," said one European dealer. * Still, market participants continued to monitor the weather in West Africa amid worries that excessive dryness during the annual Harmattan could curb output. COFFEE * March arabica coffee settled up 1.65 cent, or 1.6 percent, at $1.025 per lb. * Prices were supported by a rally in the currency of top-producer Brazil. * A stronger currency discourages producer selling by reducing local returns on dollar-traded commodities like coffee and sugar. * Prices hit a three-month low of 99.20 cents on Tuesday. Since then, they have recovered from technically oversold conditions on the relative strength index. * Brazil is expected to produce 63.7 million 60-kilo bags of coffee in 2018-19 season, up over 5 percent on a previous estimate, consultancy Safras & Mercados said. * March robusta coffee settled up $17, or 1.13 percent, at $1,524 per tonne. SUGAR * March raw sugar settled down 0.04 cent, or 0.3 percent, at 12.43 cents per lb. * Prices have closed lower in four of the past five sessions, and on Tuesday fell to a 2-1/2-month low of 12.26 cents per lb. * Brazil's center-south region crushed 12.6 million tonnes of cane in the first half of December, producing 408,300 tonnes of sugar, industry group UNICA said on Thursday. * Crushing in Brazil's main sugarcane producing region for the 2019-20 season should roughly match this year's production, as planted area shrinks but yields improve, analysts said. * March white sugar settled down $1.60, or 0.5 percent, at $339.40 per tonne. (Reporting by Ayenat Mersie in New York and Ana Ionova in London; Editing by Susan Fenton/David Evans/Jane Merriman/Dan Grebler)

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