SOFTS-Sugar prices decline, Ivorian conflict lifts cocoa

* Mills struggle to process Brazil cane crop due to rains

* Cocoa rises on heavy clashes in top grower Ivory Coast

* Coffee falls with selling largely driven by technicals (Recasts, adds analyst comment. Updates prices, price table)

NEW YORK/LONDON, March 28 (Reuters) - Sugar futures closed lower on Monday, as top producer Brazil began its harvest, while cocoa finished firm as violent conflict mounted in Ivory Coast.

Coffee prices were lower, with selling largely driven by bearish technical indicators, even as many sat on the sidelines following recent volatile moves. Volume was thin across the board.

Talk that sugar crops will be bigger than expected in the world's No. 2 sugar exporter Thailand and in India, the No. 2 producer and top consumer, was also seen adding some pressure.

"We were hearing some news that the Thai and Indian sugar crops were going to be better than expected, so that put some pressure on the market," said Nick Gentile, chief trading officer at Atlantic Capital Advisors in Jersey City.

May raw sugar futures on ICE slid dropped 0.81 cent or 3 percent to finish at 27.05, while May white sugar on Liffe closed down $10.20 at $701.60 per tonne.

Rains have disrupted the early cane harvest in Brazil but could boost the crop outlook for later in the season.

"Late rains are usually quite positive for cane development and yields during the second half of the season," said Peter de Klerk, an analyst at sugar merchant Czarnikow.

Dealers also said technicals on sugar were bearish after the key May raw sugar contract tested a topside target of 28 cents a lb and failed to extend much beyond that level. Outside pressure from the weak commodity complex was also a factor.

"I think it's more sympathy (selling) with the other commods," said Mike McDougall, senior vice-president of brokerage Newedge USA.

Societe Generale technical analyst Stephanie Aymes said in a market note that key support on May raws was at 26.30 cents with a drop below that level signaling a move down to 26.00-25.80 cents, 25.20 cents or even 24.60 cents

HEAVY GUNFIRE

Cocoa futures edged higher as the market kept a close watch on conflict in Ivory Coast. Heavy clashes broke out in the town of Duekoue, in a cocoa-producing area of western Ivory Coast, between forces loyal to incumbent Laurent Gbagbo and his rival in an election dispute.

"This could have some longer term effect on the markets. Farmers are worried about their lives right now, not their crops, and they're ignoring their crops," Gentile said.

May cocoa on ICE rose $6 to settle at $3,248 a tonne while July cocoa on Liffe inched up 4 pounds to close at 2,113 pounds a tonne.

Uncertainty about whether the Ivorian export ban, set to expire later this week, would be extended, also attracted some buyers, traders said.

International Cocoa Organization (ICCO) Executive Director Jean-Marc Anga said on Friday a ban on exports from Ivory Coast was leading to increasing supply concerns for chocolate manufacturers.

"People are just digesting what's going on and people want to see what's going on with this export ban," Gentile said.

Coffee slipped on chart-based pressure as arabica coffee futures continued to fall from the 34-year high at $2.9665 per lb, basis May, and as many sat on the sidelines following recent volatility.

May arabica coffee fell 4.65 cents or 1.7 percent to settle at $2.6395 per lb.

Open interest for arabica futures fell to the lowest level in more than 15 months on March 25, while it rose in options, showing many continue to opt for options dealings as the market is deemed too volatile.

Charts suggest that New York coffee could fall to $2.1245 per lb over the next three months, as it faces a strong resistance zone of $2.7262 to $2.77, Reuters technical analyst Wang Tao said.

Dealers said prices remained vulnerable to choppy trading on light volumes.

"You've got people playing this market with very tight stops and it's been pretty quiet which is reflected in the volumes," a London-based broker said.

"The trade are not doing anything unless they have to."

May robusta coffee on Liffe closed down $43 at $2,561 a tonne. The premium over July narrowed to $145 from $162 on Friday.

(Source: http://www.futurespros.com/news/softs-news/softs-sugar-prices-decline,-ivorian-conflict-lifts-cocoa-1000009437)