EU wheat edges up on Algeria purchase, war risks

PARIS, Sept 24 (Reuters) - Euronext wheat edged higher for a second session on Wednesday, moving further from contract lows, supported by a large Algerian purchase and news of a drone strike on Russia's main Black Sea port that rekindled war concerns.

December wheat BL2Z5 on Euronext's Paris-based futures market was up 0.4% by 1436 GMT at 190.75 euros ($223.90) per metric ton.

The most-active contract on Euronext was recovering from a contract low of 187.75 euros hit during Tuesday's session.

Euronext prices also drew support from a weaker euro EUR= and a slight rise in Chicago wheat Wv1, which was also coming off contract lows.

Wheat markets had been under pressure from rising global supply, as well as Monday's news that Argentina would temporarily suspend grain export taxes to boost dollar-generating overseas sales.

But rising estimates for the volume bought by Algeria in an import tender on Tuesday raised expectations that grain buyers may take advantage of the recent slide in prices.

Algeria’s state grains agency OAIC is believed to have purchased between 600,000 and 700,000 metric tons of milling wheat, European traders said on Wednesday.

Black Sea origins were seen as best placed to cover Algeria's purchase, partly due to a tacit exclusion of French wheat amid an ongoing diplomatic row between Paris and Algiers.

“Algeria’s tender was another reminder that Ukraine and the EU Black Sea (countries) have a lot of wheat to offer,” one German trader said.

“But it is positive that one of the very big buyers has returned to the market after a long period of quiet import demand. There are hopes that some of the other big Middle Eastern buyers could also issue tenders soon.”

News of a Ukrainian drone strike on the southern Russian port city of Novorossiisk, which killed two people, also revived worries about the war between Russia and Ukraine potentially disrupting grain trade.

No damage was reported to port infrastructure or vessels in Novorossiisk, state news agency TASS said on Wednesday, citing the Federal Agency for Sea and Inland Water Transport.

($1 = 0.8519 euros)