Arabica coffee futures on ICE rose to the highest levels in more than three months yesterday with the rise driven by tight supplies of high quality beans while raw sugar extended this week's setback from recent contract peaks. Dealers said arabica coffee futures have risen for 13 straight sessions, and are on track to extend that run, but may now be vulnerable to a downside correction. "We could see the $3.00 [a pound] level, but I would rather stay away because this market is very, very overbought," said Romain Lathiere, fund manager with Diapason Commodities Management. December arabica coffee was up 1.85 cents or 0.7 per cent at $2.7735 per pound at 1315 GMT after peaking at $2.7945, the highest level for the second month since May 11. New York coffee is due for a correction as it has come close to a strong resistance at $2.8080 per pound, Reuters analyst Wang Tao said. Robusta coffee futures turned lower with November off $8 at $2,354 per tonne after earlier rising to a peak of $2,407 a tonne. Raw sugar futures were lower as the market absorbed further forecasts for the crop in top producer Brazil. Cane industry association Unica on Thursday put Brazil's key centre-south's sugar output this season at 31.57 million tonnes, down 2.5 per cent from its July estimate of 32.38 million tonnes. Sugar production in the key centre-south region of Brazil in 2011-12 is forecast at 30.63 million tonnes, Lausanne-based consultancy Kingsman SA said yesterday. Lower not lowest "While the [Unica and Kingsman] reports show the Brazil CS crop is indeed going to be worse than anticipated earlier in the year, estimates are well above some others... and it may well be that lower figures have been priced into the market already," brokers Sucden Financial said in a daily update. Earlier last week analyst Canaplan estimated Brazil CS sugar output at 28-28.5 million, well below the latest forecasts. October raw sugar on ICE was off 0.12 cent or 0.4 per cent at 29.54 cents a pound while October whites on Liffe stood $2.20 higher at $773.40 per tonne. Cocoa futures were higher as the market continued to eye prospects for 2011-12 crops when the global balance is expected to tighten after a large surplus in 2010-11. Cocoa trees have started to bloom ahead of the mid-crop in Indonesia's main growing island of Sulawesi, but dry weather may limit overall production this year, dealers.