SOFTS-Sugar at 3-week high on spread rally; arabica tumbles
* Raw sugar open interest at June 2013 high
* Spot raw sugar spread moves to premium
* Arabica sell-stops seen triggered around $1.41 (Adds details in paragraph 1, updates prices, and adds trade comment; adds second byline, NEW YORK dateline)
By Marcy Nicholson and David Brough
NEW YORK/LONDON, April 8 (Reuters) - Raw sugar futures surged to a three-week peak in heavy volume on ICE on Wednesday on speculation that nearby supplies may be tightening, while heavy spreading lifted the spot contract to a premium for the first time since February.
Arabica coffee tumbled on chart-based and speculative selling, while New York cocoa rose on support from dollar weakness. Both markets dealt in heavy volume buoyed by spread activity.
ICE spot raw sugar futures hit a session high of 13.13 cents a lb, the loftiest since March 13, on concerns about limited supplies before the start of the cane harvest in center-south Brazil this month.
"There is tighter availability for prompt shipment and we're seeing more short-covering," said Tracey Allen, commodity analyst at Rabobank.
May raw sugar futures on ICE settled up 0.20 cent, or 1.6 percent, at 12.97 cents a lb. The May/July spread SB-1=R surged as high as 0.13 cent, the biggest premium on a spot continuation chart since Feb. 27, when the March contract expired. Continuación...