SOFTS-Sugar inches up, arabica coffee dips on firm dollar
* Raw sugar May/July spread briefly falls to discount
* Robusta defies strong dollar and rises
* Cocoa trade focused on next week's grind data (Adds details in paragraph 1, updates prices; adds broker comment, second byline, NEW YORK dateline)
By Marcy Nicholson and David Brough
NEW YORK/LONDON, April 10 (Reuters) - Raw sugar futures on ICE turned up a shade in heavy spread dealings on Friday, while arabica coffee eased under pressure from a firmer dollar and cocoa was weighed down by expectations for weak processing data set for release next week.
Strength in the greenback increases the cost of dollar-denominated commodities for investors holding other currencies.
Raw sugar inched higher in heavy volume dominated by May/July spreading, with support coming from a slow start to Brazil's cane harvest and talk of tight nearby supplies due to firm demand for cane-based ethanol.
May raw sugar on ICE closed up 0.03 cent, or 0.2 percent, at 12.83 cents a lb, while the May/July spread SB-1=R steadied around a 0.06-cent premium after falling as low as a 0.01-cent discount.
"As Brazil's cane harvest starts, a lot of cane will be diverted to ethanol production," said Hamish Smith, commodities analyst with Capital Economics. "We think there is a possibility raw sugar prices could move a little higher." Continuación...