European wheat prices edged higher on Tuesday in the wake of a rise in US markets but were pressured by French wheat's lack of competitiveness in a tender by major grain importer Egypt due to high freight rates. Benchmark December milling wheat on Paris-based Euronext, was 0.7% higher by 1613 GMT to 177.75 euros a tonne. The lowest offers, cost and freight included, in the international tender from Egypt's state commodities buyer GASC on Tuesday were for Russian and Ukrainian wheat, traders said.

In FOB terms, French wheat was the third most competitive offer but it was hampered by higher shipping rates. "Because we are not competitive due to the freight, Euronext is bound to adjust," a trader said. Prices were also supported by short covering ahead of the release on Thursday of the US Department of Agriculture's (USDA) latest crop report.

"Everyone is preparing for the USDA report with many anticipating lower production estimates than expected, which could support corn and soybean prices," the trader said.

The market has become more sensitive to any setbacks in harvest yields after the USDA put quarterly stocks of corn and soybeans below expectations in a report at the end of September.

In Germany, cash premiums in Hamburg were little changed, remaining below Paris Euronext.

Standard bread wheat with 12% protein for October delivery in Hamburg was offered for sale unchanged at 2 euros under Paris December. Buyers sought at least 3 euros under Paris.

"The market remains stable at recent levels with both domestic demand from flour mills slack and exports running at modest levels," one German trader said.

"Black Sea prices of wheat have been moving up but the Black Sea again dominated the purchase tender from Egypt today."

"However, wheat from Lithuania and elsewhere in the Baltic States is still looking cheaper in export markets than Germany, so the poor export outlook means premiums remain under Paris."