Spring grain planting is proceeding slowly after a late start reflecting shortages of working capital and operational machinery. By early June, the area sown to spring grains on the large farms was 30.4 million hectares, nearly 10 percent less than last year. Plantings in the Urals and the New Lands (Eastern Siberia)are well behind also due to rains and cold weather. The outlook for winter grains has deteriorated somewhat insofar as the area damaged by winterkill (11.5 percent) is almost double that reported earlier and about average. Reflecting the surplus of feedgrains and the reduced profitability of grains, indications are that the use of yield enhancing inputs could remain low and that yields could be less than last year. FAO tentatively forecasts the 1998 grain harvest at around 80 million tonnes, some 10 percent less than last year. Loans form the subsidized agricultural credit fund will continue to be made at 12.5 percent despite the increase in the key interest rate. Ten months into the 1997/98 marketing year, the country had exported only 2.2 million tonnes from the exportable surplus of 10 million tonnes.