In a new support document, Apple acknowledged that when an ultrawide or super ultrawide external display is connected to a Mac with the M1 chip, some resolutions supported by the display may not be available at this time.
/article-new/2020/12/lg-ultrawide-display.jpg?resize=560%2C332&ssl=1)
Apple says it is aware of this problem and has planned a fix for a future macOS update. Apple hasn’t specified exactly when a fix will be available, but the first beta of macOS 11.2 was released last week, so that’s one possibility.
To see additional resolutions for your external display, click the Apple logo in the top left corner of your Mac, open System Preferences, click Displays, and then hold down the Option key while clicking “Scaled”.
There is a common thread about this issue in the MacRumors forums.