SINGAPORE: Chicago corn futures firmed on Monday, although an upgrade to European production forecasts and supplies from the US harvest kept prices near their lowest since late 2020.

Wheat fell, although expectations of lower output in Australia and Argentina limited losses. “Corn prices are facing supply pressure,” said one Singapore-based trader at an international trading company.

“There is plenty of Brazilian corn in the market and we have big crops coming from Europe and the US” The most-active corn contract on the Chicago Board of Trade (CBOT) was up 0.1% at $4.76-1/2 a bushel, as of 0310 GMT.

Still, the market is trading close to its lowest levels since Dec. 2020. Soybeans fell 0.3% to $13.36-1/4 a bushel and wheat lost 0.6% at $6.00-1/2 a bushel.

Summer rain has benefited maize (corn) crops in much of the European Union, with Consultancy Strategie Grains raising its forecast for the EU’s 2023 maize crop by nearly 1 million metric tons to 59.6 million.

In France, an estimated 82% of maize crops were in “good or excellent” condition by Sept. 11, up from 80% the previous week, farm office FranceAgriMer said.

Meanwhile, the US government last week raised its corn crop estimate.

With huge shipments from Brazil reducing overseas demand for US corn, analysts believe US stocks could next year be near their highest in a decade.

Helping depress prices, large speculators had by Sept. 12 built their biggest net short position in CBOT corn since August 2020, regulatory data showed, with traders saying they saw further selling on Friday.

Chicago corn has fallen 30% this year.

Speculators also increased their net short position in CBOT wheat and cut their net long position in soybeans in the week ended Sept. 12, the regulatory data showed.

In the wheat market, reduced harvest potential in Australia and Argentina due to recent dry weather is expected to support prices.

A spring heat wave across large parts of Australia’s southeast, including Sydney, will intensify on Monday, the weather bureau said, with temperatures expected to peak up to 16 degrees Celsius (60 Fahrenheit) above the September average.

Turning to soybeans, US National Oilseed Processors Association (NOPA) data on Friday showed US soybean crush fell to an 11-month low in August, below almost all trade estimates.

Weak crushing demand comes as US exports struggle to compete with record Brazilian shipments.

CBOT soybean prices are down around 12% this year.