La Niña: How the climate phenomenon affects the commodities market in 2025

The dynamics of climate phenomena are having an increasingly decisive influence on global markets, especially agricultural commodities. In October, NOAA (the US National Oceanic and Atmospheric Administration) officially confirmed La Niña, a climate phenomenon that influences rainfall and temperatures in various regions of the planet. The institution's official bulletin points out that the current event remains weak, but can still have a noticeable impact on the global and regional climate. 

In this article, we'll discuss: 

• The formation and mechanisms of La Niña;
• The impacts of this climatic phenomenon;
• How agricultural commodities are affected;
• The reaction of futures markets and expected trends.

Have a good read! 

What is La Niña? 

La Niña is a climate phenomenon marked by the cooling of the surface waters of the Equatorial Pacific Ocean, causing changes in global atmospheric circulation. In this scenario, the trade winds, which are stable and humid winds that blow in the subtropical zones, become stronger, pushing warm waters into the western Pacific and allowing cold waters to rise in the eastern Pacific, which impacts temperature and precipitation patterns in various regions of the world. 

According to NOAA, La Niña conditions emerged in September this year. IRI (International Research Institute for Climate and Society) models indicate that the event could continue until February 2026, although the probability decreases to 60% in the period from October to December 2025 and to 50% in the period from December 2025 to February 2026. 

What are the impacts of La Niña? 

The La Niña phenomenon causes changes in the wind regime and maritime flows in the Pacific Ocean. These events alter the flow of energy (wind and heat) between tropical and non-tropical areas, thereby changing the rainfall patterns and average temperatures in the areas under its influence. 

These effects depend on the intensity of the event (level of cooling of the Pacific waters), the period of occurrence and the duration. A neutral to weak event generally generates little change in the rainfall regime. 

The correlation between La Niña and changes in rainfall varies depending on the region, and is most significant between September and January, although variations of lesser intensity are also observed in other months. 

How will agricultural commodities be impacted by La Niña? 

For agriculture, the impacts of La Niña will depend on the intensity of the event, its duration and whether the phenomenon reaches critical moments in the development of crops . Below are Hedgepoint's forecasts on the expected effects for each commodity, depending on the intensity of the weather event.  

Coffee

The impact of La Niña on coffee varies according to region and crop. In Brazil, it could benefit the flowering of arabica, due to lower temperatures, and the productivity of conilon, due to more rainfall.  

Elsewhere, such as Vietnam, Colombia and Central America, excessive rains and storms could disrupt the 25/26 harvest, but the impacts on productivity remain uncertain. 

Soybeans and corn

The expected impacts on the soybean and corn crops in the period from October to February are mainly concentrated in the Southern Hemisphere, with the greatest impacts in Argentina, Uruguay and the southern region of Brazil.  

The trend of below-average rainfall in the southern half of South America is likely to cause problems for crop development in southern Brazil, Uruguay and Argentina. On the other hand, the trend of above-average rainfall and milder temperatures in the northern half of South America tends to be favorable for crops in north-central Brazil. 

Wheat

La Niña could bring below-average rainfall and higher temperatures between October and February to North America, Europe and the Black Sea region, which could affect the initial development of winter wheat crops in the main producing countries. 

Palm Oil

La Niña usually brings above-average rainfall during the so-called "rainy season" in Southeast Asia, increasing the risk of flooding in oil palm plantations and problems with palm and palm oil logistics in Indonesia and Malaysia, the world's two largest palm oil producers. 

Sugar

Although La Niña could affect the Center-South region of Brazil during the critical development phase of the 26/27 harvest, its effects will depend on the intensity and duration of the event.  

Globally, the influence of the phenomenon varies, with limited historical correlation in the main producing countries of the Northern Hemisphere, such as India and Thailand. However, a particularly intense episode could increase humidity in Southeast Asia and Oceania, which could disrupt the pace of milling operations in Thailand and crushing in Southeast Asia. 

Cocoa

La Niña could influence production by altering rainfall and temperature patterns in important regions. In West Africa, the occurrence of the phenomenon between October and December may favor increased humidity and milder temperatures, relieving the stress of the dry season. In Ecuador, on the other hand, reduced rainfall could affect flowering. These climate changes could affect the expected surplus for the 25/26 season. 

How will the futures market and forecasts react to La Niña? 

The agricultural commodities futures market tends to react with greater volatility to the uncertainties generated by La Niña and its regional effects.  

The presence of the phenomenon, even at a low intensity, concentrates the risk in the critical periods of planting and development of soybeans and corn in Argentina, Uruguay and southern Brazil. The risk of intense drought in this region, a characteristic of the phenomenon, puts pressure on the future prices of these grains.  

In addition, the market reaction will be amplified by the potential for logistical problems for palm oil in Southeast Asia due to excessive rainfall and, in the case of wheat, by the expectation of a mild winter in the Northern Hemisphere, affecting initial development. 

The climate instability scenario is pushing market players to adopt a more defensive stance. The expectation is for higher prices and oscillations in South American grain contracts and close monitoring of logistical risks in Asia. 

How can we mitigate risks and identify opportunities generated by La Niña? 

Intelligent information management is crucial both to mitigate risks and to identify opportunities in a dynamic climatic environment such as that caused by La Niña.  

Adapting agricultural practices, portfolio diversification and continuous risk assessment, combined with a flexible approach to market conditions, are fundamental in an environment influenced by climatic events. Keeping track of weather data and commodity market trends is therefore indispensable for assertive decision-making. 

To navigate this environment more safely, Hedgepoint offers detailed market data and analysis, combined with hedging tools. These solutions help protect against volatility and contribute to efficient risk management.  

To explore this market intelligence and its products, and stay informed about the possible effects of La Niña, visit the Hedgepoint HUB, subscribe to the newsletter or contact us via the website. 

This document has been prepared by Hedgepoint Global Markets LLC and its affiliates ("HPGM") solely for informational and instructional purposes and is not intended to establish obligations or commitments to third parties, nor is it intended to promote an offer, or the solicitation of an offer, to buy or sell any securities, futures, options, currencies and swaps or investment products. Hedgepoint Commodities LLC ("HPC"), a wholly owned entity of HPGM, is an Introducing Broker and a registered member of the National Futures Association. Trading futures, options, currencies and swaps involves significant risk of loss and may not be suitable for all investors. Past performance is not necessarily indicative of future results. Hedgepoint clients should rely on their own independent judgment and that of external advisors before entering into any transaction that is introduced by the company. HPGM and its associates expressly disclaim any liability for any use of the information contained herein that results directly or indirectly in damages of any kind. In the event of questions not resolved by our customer service team (client.services@hedgepointglobal.com), please contact our internal ombudsman channel (ombudsman@hedgepointglobal.com ) or 0800-878 8408/ouvidoria@hedgepointglobal.com (for customers in Brazil only).