Arabica coffee futures in New York soared 16.2 per cent in a single session on Monday, the largest intraday jump ever recorded for the contract, to settle at $3.04 per pound. The move was the most dramatic in a broad-based rally that saw cocoa climb 13.1 per cent to $5,694 per tonne, Chicago soybeans gain 4.4 per cent to $11.92 per bushel, and corn and wheat advance by more than 2 per cent. The trigger was a convergence of adverse weather forecasts and a rapid unwinding of speculative short positions.

The US official climate agency reaffirmed outlooks for drier and warmer conditions across the Midwest from mid-July, a critical period for corn and soybean pollination. Even though soil moisture reserves remain adequate, the mere prospect of heat stress was enough to drive prices higher in markets already on edge. In coffee, analysts in São Paulo noted that the rally was amplified by technical factors: speculative funds rushed to cover short bets, triggering stop-loss orders in a market with reduced liquidity as producers hold back sales and a rain-delayed Brazilian harvest trails the five-year average. A director at a Brazilian brokerage said the move was not supported by fundamentals and likely reflected a liquidity squeeze.

The weather anxieties are not confined to North America. In West Africa, heavy rains in Ivory Coast and Ghana have flooded cocoa farms, disrupted transport and raised the risk of fungal diseases, threatening the upcoming mid-crop. European grain markets also felt the heat: France’s agriculture minister reported severe damage from an intense heatwave stretching from Spain to Greece, while traders in Chicago noted that any further yield downgrades could shift global import demand toward US and South American supplies. China’s return as the top destination in US soybean export inspections and signs of recovering hog prices added demand-side support to the oilseed complex, and a large Saudi Arabian purchase of 661,000 tonnes of wheat lent additional strength.

The rally unfolded against the backdrop of a developing El Niño, which the Rosario grains exchange in Argentina warned could bring both beneficial rains and the risk of flooding to the Pampas farm belt. While current projections favour a strong soybean and corn crop, the exchange cautioned that excess moisture at harvest could damage yields and snarl logistics. The market’s immediate attention now turns to the USDA’s weekly crop condition report and updated weather models for the US Corn Belt, as well as the evolution of El Niño conditions in the equatorial Pacific.