* Conab forecasts larger Brazil sugar cane crop
* Small delivery expected against May white sugar
* May/July arabica spread narrows (Adds spread to paragraph 1, updates prices; adds broker comment, second byline, NEW YORK dateline)
By Marcy Nicholson and Nigel Hunt
NEW YORK/LONDON, April 13 (Reuters) - Raw sugar futures rose on Monday as funds rolled forward a large net short position out of the May contract, lifting its premium over the July contract to a seven-week high.
Coffee futures fell, causing the arabica May/July discount to narrow, while cocoa futures also climbed.
Raw sugar defied the strong U.S. dollar and rose as the index roll dominated the session and speculators were forced to cover their short positions in the spot contract, lifting its premium, traders said.
“People are pretty one-sided in the market right now and a lot of shorts are getting pulled out of the market right now,” said Jack Scoville, a vice president for Price Futures Group in Chicago.
May raw sugar on ICE rose 0.18 cent, or 1.4 percent, to settle at 13.01 cents a lb. The May/July spread SB-1=R surged, rising as high as a 0.20-cent premium, the highest since Feb. 24.
Speculators cut their net short positions in raw sugar contracts in the week ended April 7, taking it off a record large position, U.S. Commodity Futures Trading Commission data showed on Friday.
Dealers noted a large crop was expected in Brazil despite some minor delays caused by recent wet weather.
“Everyone is expecting a big crop come July onwards. Wet weather is going to delay it a matter of days, not weeks or months,” one dealer said.
In its first forecast of the new crop, Conab said that Brazil is expected to produce a total 37.35 million tonnes of sugar, up 5 percent from a year ago, with most of the growth coming from the recovery of the main crop in the center-south region.
May white sugar futures, which expire on Wednesday, closed up $1.30, or 0.4 percent, at $366.90 per tonne.
Dealers said a small delivery was currently anticipated.
Arabica coffee futures traded in a choppy session dominated by May/July spreading KC-1=R, which narrowed to as much as a 2.05-cent discount from 2.70 cents on Friday. The most active May contract fell 1.35 cents, or 1 percent, at $1.3375 per lb.
Robusta coffee futures dropped, with May settling down $24, or 1.3 percent, at $1,789 a tonne.
May New York cocoa rose $18, or 0.6 percent, to finish at $2,799 a tonne while May London cocoa ended up 13 pounds, or 0.7 percent, at 1,953 pounds a tonne. (Editing by Crispian Balmer, Susan Thomas and Gunna Dickson)