LONDON: European Union wheat futures fell on Wednesday as low prices paid by Algeria at its latest tender highlighted the challenge of finding markets for a hefty incoming crop in western Europe.

Benchmark December on Euronext milling wheat futures settled 1% lower at 179.75 euros ($199.92) a tonne, the weakest closing level since July 23.

A dealer said technical support was now seen at 179.25

euros, the closing price on July 23.

Algeria state grains agency OAIC bought 570,000 tonnes of optional-origin milling wheat at an average price of $215.50 a tonne, cost and freight included in a tender which closed on Tuesday, European traders said.

Part of the purchase was expected to be sourced from France, Algeria's main wheat supplier, but competitively price wheat from the Baltic region and Romania could also feature.

Observers have been raising their estimates for this year's French wheat crop in the past days with Strategie Grains pegging it at 38.98 million tonnes, 2 million tonnes above its July 11 forecast.

"It seems more and more evident that there will be a lot of wheat to sell outside the EU and we will need to work on it," a trader said.

Around 30% of the soft wheat harvest in a zone including Brittany and the north of Paris was still to be harvested, Strategie Grains said.

In Germany, the sudden change in the weather this week from heatwave to rain was creating concern about the final stages of the harvest as a harvest forecast was scaled back.

The heatwave in Germany last week and over the weekend enabled about 70% of wheat to be harvested, traders estimated.

The remaining 30% includes large unharvested areas in the northern and north-eastern regions of Schleswig-Holstein and Mecklenburg-Vorpommern, important production areas for Germany's wheat exports.

But harvesting was interrupted by showers sometimes heavy, in north and east Germany on Monday and Tuesday. More showers are forecast up to Saturday evening.

"Germany's harvest progress has been remarkably fast this year, naturally because of the first-class conditions in the heatwave last week," one German trader said. "We normally only start harvesting in late July."

"But the harvest is not finished yet and late rain damage is still possible. We now have to await and see how much rain actually falls, the final stages of work are being interrupted by the rain," the trader added.

Standard bread wheat with 12% protein for September onwards delivery in Hamburg was offered for sale at 3.50 euros under Paris December

against 4.00 euros under on Tuesday. Buyers were seeking at least 4.50 euros under.