Euronext wheat fell to one week low on Wednesday, pressured by a sharp drop in Chicago following a US government forecast of record world stocks next season and beneficial rain for crops across Europe.

A purchase by Algeria, the biggest buyer of European Union wheat, failed to support the market as prices reported were seen as relatively low and the estimated volume in line with the country's usual requirements.

September milling wheat on Paris-based Euronext settled 2.50 euros, or 1.3%, lower at 184.00 euros ($199.14) a tonne, its weakest level since May 5.

Chicago wheat slid by more than 2% to approach the psychological $5 a bushel threshold.

In a widely followed report on Tuesday, the US Department of Agriculture (USDA) projected world wheat stocks in 2020/21 above market expectations at a record high, while also increasing its forecast for 2019/20 stocks.

The wheat market has also come under pressure from rain across Europe, expected to limit crop stress after a dry start to spring, including in major Black Sea exporting countries Russia and Ukraine.

"The main factor today is the USDA report which was bearish," a futures dealer said.

"There's also been some rain and there's not much demand either domestically in France or elsewhere in the EU."

Farm office FranceAgriMer raised its projection of French soft wheat stocks at the end of the current season in June to 2.9 million tonnes, from 2.6 million estimated last month.

An upward revision to market supply and weaker demand from livestock feed makers and other European Union countries outweighed an increase in expected exports outside the EU to a new record.

Algeria's state grains agency OAIC purchased around 500,000 tonnes of milling wheat at between $218 and $218.50 a tonne, cost and freight included, in an import tender which closed on Tuesday, traders said on Wednesday.

In Germany, standard bread wheat with 12% protein for September delivery in Hamburg was offered for sale little changed at around 1.5 euros under the Paris December contract. Buyers were offering around 2 euros under Paris.