U.S. CORN MARKET SKEWED BY SOVIET BUYING Recent purchases of U.S. corn by the Soviet Union have skewed the domestic cash market by increasing the price difference between the premium price paid at the Gulf export point and interior levels, cash grain dealers said. Many dealers expect the USDA will act soon to reduce the cash price premium at the Gulf versus the interior -- which a dealer in Davenport, Iowa, said was roughly 20 pct wider than normal for this time of year at 25 cents a bushel -- by making it worthwhile for farmers to move grain. By lowering ASCS county posted prices for corn, the USDA could encourage farmers to engage in PIK and roll corn sales, where PIK certificates are used to redeem corn stored under the government price support loan program and then marketed. If the USDA acts soon, as many dealers expect, the movement would break the Gulf corn basis. "The USDA has been using the Gulf price to determine county posted prices," one dealer said. "It should be taking the average of the Gulf price and the price in Kansas City," which would more closely reflect the lower prices in the interior Midwest. "But we don't know when they might do it," an Ohio dealer said, which has created uncertainty in the market. The USDA started the PIK certificate program in an effort to free up surplus grain that otherwise would be forfeited to the government and remain off the market and in storage. Yesterday, USDA issued a report showing that only slightly more than 50 pct of the 3.85 billion dlrs in PIK certificates it has issued to farmers (in lieu of cash payments) had to date been exchanged for grain. With several billion dlrs worth of additional PIK certificates scheduled to be issued in the coming months, the USDA would be well advised to encourage the exchange for grain by adjusting the ASCS prices, cash grain dealers said. A byproduct of the Soviet buying has been a sharp rise in barge freight costs quoted for carrying grain from the Midwest to the export terminals, cash dealers said. Freight from upper areas of the Mississippi have risen nearly 50 pct in the past two weeks to over 150 pct of the original tariff price. The mild winter and early reopening of the mid-Mississippi river this spring have also encouraged the firmer trend in barge freight, dealers noted. The higher transportation costs have served to depress interior corn basis levels, squeezing the margins obtained by the elevators feeding the Gulf export market as well as discouraging farmer marketings, they said. "The Gulf market overreacted to the Soviet buying reports," which indicate the USSR has booked over two and perhaps as much as 4.0 mln tonnes of U.S. corn, one Midwest cash grain trader said. But dealers anticipate that once the rumors subside, freight rates will settle back down because of the overall surplus of barges on the Midwest river system.