CANBERRA, Nov 13 (Reuters) - Chicago corn futures on Monday hovered near three-year lows as the market absorbed last week's U.S government forecast that farmers will produce the biggest corn crop on record this year.
Soybean prices rose and wheat fell.
The higher U.S. production estimate caught the market off guard, said Rod Baker at Australian Crop Forecasters in Perth.
He said the market also was watching to see if dry conditions in Brazil would damage the country's second corn harvest.
"If those dry conditions continue, that's going to be supportive of prices. If it turns around and they get that second crop in, that would be bearish," he said.
The U.S. Department of Agriculture (USDA) last week raised its U.S. 2023-24 corn harvest estimate to 15.234 billion bushels from 15.064 billion.
Farmers said a lack of rainfall in Brazil's top grain state Mato Grosso was compromising the second corn crop.
The most-active corn contract on the Chicago Board of Trade (CBOT) was down 0.3% at $4.62-3/4 a bushel, as of 0541 GMT, after having hit $4.62, equalling last Friday's low and the weakest price since December 2020.
CBOT corn has fallen around 32% so far in 2023 and is headed for the biggest yearly decline in prices in a decade as a record harvest in Brazil moves the market closer to surplus.
Brazilian crop agency Conab forecasts total corn production in the 2023/24 cycle of around 119 million tons, down 9.6% from its previous season.
In other crops, wheat fell 1% to $5.69-3/4 a bushel and soybeans rose 0.4% to $13.52-1/2 a bushel.
In soybeans, the USDA lifted its forecast for U.S. production to 4.129 billion bushels from 4.104 billion bushels.
As with corn, Brazil is delivering a record soybean harvest this year, pressuring prices. But low rainfall Mato Grosso has delayed soybean planting by up to 30 days and forced replanting in some areas, curtailing yield potential, farmers said.
Despite the weather, Conab last week raised its forecast for Brazilian soybean production to 162.420 million tons.
Moving to wheat, the USDA last week raised its forecast for Russia's wheat crop this year by 5 million tons to about 90 million tons and pegged global ending stocks above expectations.
Traders were monitoring ongoing rainfall in France where grain sowings further slowed last week and are now running well behind last year.
Commodity funds were net sellers of Chicago corn, wheat and soymeal futures on Friday and net buyers of soybeans and soyoil, traders said.
(Reporting by Peter Hobson; Editing by Sherry Jacob-Phillips)
