U.S. GRAIN TRADE CALLS SHULTZ REMARK SIGNIFICANT

  A statement yesterday by Secretary
  of State George Shultz after he met with wheat growers that
  U.S. agricultural products must be competitively priced was
  significant in that he recognized the importance of the Soviet
  market and the need for U.S. prices to be at world market
  levels, U.S. grain trade industry officials said.
      They said that Shultz's comments, while not explicitly
  endorsing subsidized wheat sales to the USSR, were noteworthy
  because they were not negative towards such action.
      In response to a query on what the State Department's
  position is on selling subsidized wheat to Moscow, Shultz told
  the leaders of the National Association of Wheat Growers that
  prices must be competitive if the U.S. is going to trade.
      The Soviet Union, the world's largest grain importer, has
  bought no U.S. wheat for more than a year, complaining the
  price was far above world market levels. A U.S. offer last fall
  to sell the Soviets lower-priced wheat through the export
  enhancement program, EEP, was also rebuffed due to the price.
      Shultz was said to be adamantly against the U.S. wheat
  offer last year and has been reported to be one of the major
  obstacles in making another subsidy overture to the Soviet
  Union, grain industry sources said.
      Intense speculation the U.S. might make a fresh EEP wheat
  offer to the Soviets has boosted grain prices significantly in
  recent trading sessions. Kansas City hard wheat futures rose
  another 2-1/4 cents by midday at 2.88-1/4 dlrs per bushel,
  while CBT March wheat was up 1-1/2 cents at 2.92-1/2 dlrs.
      "I'm not sure this is an about-face, but it's clearly a
  recognition that unless we're competitive, we won't sell to the
  Soviet Union," said a lobbyst for a major commodity group.
      "We have to be competitive. It's ridiculous to say that
  somebody is going to buy your product if they can get the same
  thing at a lower price somewhere else," Shultz told the farm
  leaders. "That is our approach in negotiations with the
  Soviets," he said.
      If those comments do signal that the State Department is no
  longer opposed to the U.S. selling wheat to the USSR under EEP,
  it certainly improves the chances for an EEP wheat offer to
  Moscow, an industry lobbyst said.
      National Wheat Grower's officials were taking a cautious
  attitude towards the secretary's comments.
      "His comments were not discouraging, but they didn't in our
  judgment promise any immediate action on EEP," an official with
  the wheat group said.
      The Wheat Growers official noted, however, that "there is
  significance in that fact that we haven't seen any significant
  negative commentary on the idea of EEP wheat to the Soviets."
      In a meeting with exporters this week, Secretary of
  Agriculture Richard Lyng refused to comment on their request
  that the administration offer subsidized wheat to Moscow, the
  officials said.
      An aide to USDA undersecretary Daniel Amstutz, who is
  reported to be strongly opposed to EEP wheat to the Soviets,
  said that the Shultz comments "are consistent with what he
  (Shultz) has taught for years as an economist," but said they
  don't necessarily relate to the Soviet Union.
      Amstutz could not be reached for comment, and an aide to
  Lyng said Lyng would not comment on Shultz's statements.
      But trade sources were hopeful that the Shultz comments may
  indicate some movement towards EEP wheat to Moscow.
      "If he didn't say no, then there's a chance. This is
  potentially a positive development," a commodity source said.
  

