PARIS: European wheat prices edged lower on Wednesday in the wake of a setback in Chicago after rallying in the previous session, with traders saying the market lacked fundamental elements to justify a further rise.

Benchmark December milling wheat on Paris-based Euronext, was down 0.3% by 1405 GMT at 187.00 euros a tonne.

"We did not understand why wheat rallied so much in Chicago yesterday," a trader said. "Since there was nothing to feed the bull, it is falling back a bit today."

Most traded wheat on the Chicago Board of Trade December was down 1.3% at $5.56-3/4 a bushel on technical selling and profit-taking a day after it climbed to its highest level since April.

Eyes were now on the US Department of Agriculture (USDA) crop report due on Sept. 11 which will assess damage from a drought in the Midwest grain belt and a mid-August wind storm.

In Germany, wheat for export to Algeria and Britain saw continued demand. However, low prices offered by the Baltic states meant Lithuania especially was believed to be winning large sales to other markets.

"Following the poor French harvest, we in Germany continue to receive purchase inquiries for wheat meeting Algerian specifications," one German trader said. "I think we may see ships sailing from Algeria with German wheat in September, October and November."

Algeria is traditionally a huge export customer for France. But reduced export supplies after a small French harvest mean Polish traders have also received requests for wheat for Algeria in past days.-