SOFTS-Sugar turns lower as dollar firms, cocoa also down

* Robusta coffee seen in surplus in 2009/10

* Fund buying seen limiting scope for setback in cocoa

LONDON, Oct 27 - Sugar prices turned lower on Tuesday after a short-lived rally, weighed by a firmer dollar and improving crop prospects in Brazil, dealers said.

Cocoa prices also fell as hedge selling picked up after the rise in prices to multi-year highs while coffee edged up.

"The sugar market is becoming like an old boxer who is determined to show us what he can do, but just does not have the stamina or presence of mind to know when he should stay down and take a longer count," Sucden sugar trader David Sadler said.

"He just keeps on sticking his head up and taking another hammer blow," he added in a market note on Tuesday.

Prices fell sharply last week, weakened partly by favourable weather for harvesting in top producer Brazil.

"The market has been on the retreat ever since (the Brazil report). I don't think there is anything bullish out there," one London dealer said.

March raws on ICE fell 0.08 cent to 22.86 cents a lb by 1540 GMT. The contract had traded as high as 24.68 cents early last week.

December in London eased $0.60 to $573.60 a tonne.

The dollar rose to two-week highs against the euro on Tuesday as investors sought shelter in the greenback after data showed U.S. consumer confidence worsened in October, suggesting a global recovery could stall.

Cocoa futures eased but remained within striking distance of multi-year peaks.

"A little bit of hedge related selling is coming into New York and London from Ivory Coast," one cocoa dealer said.

Dealers said fund buying, some related to Deutsche Bank's rebalancing of its exchange-traded commodity funds, has helped to fuel the run-up in cocoa prices.

"There is still a lot of fund buying. I can't see the market backing off too much unless this fund buying disappears altogether," one London dealer said.

ROBUSTA REBOUND

March cocoa in London stood 7 pounds lower at 2,201 pounds a tonne. The contract had set a 24-1/2 year high for the second month of 2,226 pounds on Monday.

December cocoa on ICE was off $14 at $3,340 a tonne after earlier peaking at $3,384. The contract rose last week to a 30-year high for the front month of $3,412 a tonne.

Coffee prices edged up, regaining some ground after a steep setback late last week.

January robustas stood $38 higher at $1,449 a tonne after rising early to a peak of $1,483. Dealers said the market may struggle to convincingly breach the key $1,500 level.

"I think one of the fundamental reasons you are not seeing us back at the $1,500 level is because people are waiting for the Vietnamese crop to pick up," said CoffeeNetwork analyst Andrea Thompson.

Thompson said she expected the Vietnamese crop to be around 20 million (60-kg) bags, down from about 21 million last year.

There are, however, some forecasts that the decline may be steeper. Last week International Coffee Organization Executive Director Nestor Osorio put the crop at 16 million to 18 million bags.

"The total global (coffee) crop will go back to a deficit in 2009/10 but within that the arabica market will be in deficit but my figures show the robusta market will be in surplus," Thompson said.

Vietnam's coffee exports surged 53.8 percent in October from the same month last year to an estimated 60,000 tonnes, or 1 million bags, the government said on Tuesday.

December arabicas edged up 0.10 cent to $1.3660 per lb.