HAMBURG/PARIS - Algeria's state grains agency OAIC purchased around 700,000 tonnes of milling wheat in a tender on Wednesday, European traders said in updated assessments on Thursday.

OAIC is thought to have paid between $275 and $276 a tonne, cost and freight (c&f) included, traders said.

Initial assessments earlier on Thursday had put the volume at between 550,000 and 600,000 tonnes, but the total was now thought to have reached 720,000 tonnes, traders said. 

However, some traders continued to estimate the volume at around 600,000 tonnes.

OAIC, one of the world's largest wheat buyers, does not publish details of its grain tenders, and subsequent estimates by traders can vary.

Reflecting a rally in international markets, the reported prices were much higher than an estimated $263.50-$264 a tonne c&f paid by OAIC in its previous tender last week when it booked around 600,000 tonnes. 

The origin of the wheat is at the seller's option and is sought for shipment in Dec. 1-15 and Dec. 15-25, except if sourced from South America when shipment is between Nov. 1-15 and Nov. 16-30.

Despite changes to OAIC's tender terms aimed at allowing Black Sea origins like Russian wheat to be offered, suppliers were expected to stick with European Union origins, traders said.6

“I expect about half to be supplied from the northern EU with the Baltic States, Poland and Germany in with a chance,” one trader said.

“I suspect France may supply much of the rest as France still needs a large export outlet.”

In its previous tender, OAIC had introduced a higher limit for insect damage in high-protein wheat, removing a longstanding barrier to Black Sea supplies. 

However, a recent surge in Russian prices has eroded the country's usual price advantage over EU wheat. 

Another change to OAIC's terms, increasing the minimum requirement for the so-called "W" measure of baking quality for high-protein wheat, has also hurt the chances of competitive Black Sea offers, according to traders.

(Reporting by Michael Hogan in Hamburg and Gus Trompiz in Paris, editing by Mark Potter and Jane Merriman) ((michael.j.hogan@thomsonreuters.com; +49 172 671 36 54; Reuters Messaging: michael.hogan.thomsonreuters.com@reuters.net))