Cocoa prices settled mixed on Thursday, with July ICE NY cocoa closing down 1 dollar, or 0.02 percent, while July ICE London cocoa closed up 35 pounds, or 1.11 percent. New York cocoa was pressured by a stronger dollar, which rose to a 13-month high, and by rising ICE cocoa inventories that stood at 2,918,736 bags on Wednesday, just below a 1.75-year high. London cocoa recovered from early losses after the British pound tumbled to a 2.25-month low, boosting cocoa priced in sterling. The market had rallied to three-week highs on Wednesday as traders priced in weather risks following confirmation of an El Niño pattern, which typically brings warmer, drier conditions to West Africa and threatens cocoa production. Funds held their largest net-short position in NY cocoa in more than three years as of June 9, which could fuel a short-covering rally. Early surveys of the 2026/27 West African cocoa crop show below-average cherelle formation, signaling a weak outlook for the main harvest beginning in October, while the Ivory Coast reported that cumulative shipments reached 1.95 million metric tons in the current marketing year, up 18.9 percent from a year ago, though it expects 2025/26 production to fall 10.8 percent to 1.65 million metric tons. Global cocoa demand showed mixed signals, with North American first-quarter grindings down 3.8 percent and European grindings down 7.8 percent to a 17-year low, while Asian grindings unexpectedly rose 5.2 percent. StoneX cut its 2026/27 global cocoa surplus estimate to 149,000 metric tons from 267,000 metric tons, citing El Niño risks, and also reduced its 2025/26 surplus forecast to 247,000 metric tons.