* Coffee sets new peaks, charts point to further gains
* Cocoa rally loses some momentum despite Ivorian conflict
* Sugar seen rangebound in short-term
LONDON, March 9 (Reuters) - Arabica coffee futures rose to a 34-year high on Wednesday and looked poised for further gains, boosted by both chart-based buying and supportive fundamentals.
Cocoa futures slipped back further from last week's 32-year peak but remained underpinned by conflict in Ivory Coast while sugar edged up but remained within its recent trading range.
"Funds and speculators have come back into the (coffee) market in the last few weeks and the upward momentum is phenomenal," Andrea Thompson, analyst at CoffeeNetwork said.
May arabica coffee on ICE stood 3.90 cents or 1.4 percent higher at $2.9110 per lb at 1217 GMT after peaking at $2.9120, a 34-year high for the benchmark second month.
"The market is heading for the long-term channel resistance at 306 (cents a lb)," technical analyst Stephanie
Aymes of Societe Generale said in a market note on Wednesday.
"The recent break above the steep bullish channel in place since last June highlights the strength of the uptrend."
Supplies of high quality arabica coffee had been tightened by successive below normal crops in key producer Colombia.
"Colombian production is slowly recovering from the low levels of the three preceding crop years and an increase is expected in crop year 2011/12," the International Coffee Organization said on Wednesday.
Colombia is expected to produce around 9 million bags in 2010/11, up from around 8.1 million bags the previous crop, the ICO said. The crop remains, however, significantly below the 12.5 million bags produced in 2007/08.
Robusta coffee futures on Liffe rose to a three-year high, boosted mainly by spillover strength from the arabica market.
"The overall supply picture for robusta isn't as tight as arabica, but because Vietnam are holding back coffee, their domestic prices are at record highs," CoffeeNetwork analyst Thompson said.
May robusta coffee was up $50 at $2,512 a tonne after peaking at $2,516, the highest level for the second month since March 2008.
COCOA RETREATS
Cocoa futures on ICE were lower as the market lost further ground after last week's advance to a 32-year high.
"There was a loss of momentum and some sell signals which may have prompted a round of profit-taking that was quite sharp," a London-based broker said.
"On top of that the opening in New York was particularly thin which may have enhanced the sharpness of the drop."
May cocoa on ICE fell $60 or 1.65 percent to $3,573 a tonne. The contract peaked at $3,775 a tonne last week, a 32-year high for the second month.
The market remained underpinned by turmoil in top grower Ivory Coast.
Thousands of women marched through Abidjan on Tuesday calling for Laurent Gbagbo to step down, but witnesses said security forces shot four people dead near the scene of one march and another was broken up by armed youths.
Ivory Coast incumbent leader Gbagbo has moved to nationalise the country's cocoa industry, a move described by a British official on Wednesday as "a desperate act."
"Many farmers face liquidity problems, making it more difficult to care for their trees and renew plantations," Commerzbank said in a market note on Wednesday.
"That said, an unusually high supply of cocoa beans is being reported from neighbouring countries, a part of which is likely to be smuggled beans from Ivory Coast."
May cocoa on Liffe was off 46 pounds or 2.0 percent at 2,274 pounds a tonne.
Sugar prices were higher but failed to breach resistance at 31.00 cents a lb, basis May raws with the market peaking at 30.97 cents.
"We believe our 31.00/29.00 (cents a lb) range on May NY will hold," Sucden Financial said in a market note.
May raws stood 0.11 cent higher at 30.81 cents a lb while May whites on Liffe rose $4.90 to $768.00 a tonne.
http://www.forexyard.com/en/news/SOFTS-Arabica-coffee-sets-34-year-high-charts-bullish-2011-03-09T123917Z
