CANBERRA: Chicago wheat futures drifted back towards three-year lows on Tuesday amid strong supply of cheap Russian grain and an upward revision to US production forecasts, but anticipation of weaker harvests in Argentina and Australia limited losses. Corn and soybean prices fell.

Buyers expect wheat prices to fall further and are therefore purchasing only what they need, reducing demand, said Ole Houe, director of advisory services at Australian agricultural brokerage IKON Commodities.

“Prices will be higher in 6 months but the bottom is not here yet,” he said. Most-active Chicago Board of Trade (CBOT) wheat futures were down 0.3% at $5.63 a bushel by 0324 GMT. Wheat on Friday plunged to $5.40, its lowest level since September 2020, after the US government unexpectedly raised its estimate for US production to 1.812 billion bushels from 1.734 billion bushels.

Prices recovered somewhat on Monday, but pressure from Russian supply remains, with the European Union’s crop monitoring service MARS raising its estimate for Russia’s 2023 harvest to 89.7 million metric tons from 86.7 million tons forecast in June.