EU wheat slips as Canada crop estimate adds to supply glut

PARIS, Dec 4 (Reuters) - European wheat futures eased on Thursday as a bigger than expected increase to Canada's official harvest estimate kept attention on abundant global supply.

March wheat BL2H6, the most-active contract on Paris-based Euronext, was down 0.7% at 190.00 euros ($221.46), a metric ton by 1650 GMT.

Statistics Canada estimated the country's all-wheat crop for 2025/26 at a record level, exceeding market expectations.

The agency's sharper than anticipated upward revision to its harvest estimate came as the wheat market braced for bumper crops in southern hemisphere exporters Argentina and Australia.

"It's an almost perfect production year across the world," a futures dealer said. "That's why we risk seeing another downward price trend in the second half of the season."

Losses on Euronext were limited by a slight rise in Chicago futures Wv1, which drew support from a one-month low for the dollar index and hopes of Chinese demand. GRA/

A large import purchase by Algeria, with traders estimating it booked up to 900,000 tons in a tender on Wednesday, also helped underpin prices.

Talk that mixed quality in Argentina's harvest may limit its sales to Algeria also brought some relief to the European market.

However, positive reaction to the tender result was tempered by the fact Algeria appeared to have skipped January delivery in favour of February shipment, and by an ongoing absence of French offers due to diplomatic tensions between Algiers and Paris, traders said.

Fears earlier this week of military escalation in the Black Sea, after Moscow threatened to cut off Ukraine's sea access in response to drone attacks on Russia-linked ships, had subsided.

"Global grain markets remain heavy despite brief geopolitical rallies," British merchant ADM Agriculture said in a note, adding that traders were turning their attention to a world supply-and-demand report from the U.S. Department of Agriculture next Tuesday.

($1 = 0.8579 euros)