March 30 (Bloomberg) -- Corn prices fell the maximum allowed by the Chicago Board of Trade after a government survey showed U.S. farmers plan to sow more of the grain than analysts expected this spring and the most since 1944. Soybeans also dropped.

Corn acres will rise 15 percent from last year to 90.454 million, the U.S. Department of Agriculture said. Soybean acres may fall 11 percent to 67.14 million. Corn production could rise 18 percent to more than 12.4 billion bushels, boosting supplies for meat companies such as Tyson Foods Inc. and ethanol producer Archer Daniels Midland Co.

``The increase in corn acreage means farmers could produce a record crop, enough to satisfy livestock and ethanol demand and rebuild global inventories,'' which are forecast to drop to the lowest since 1978 before the U.S. harvest, said Greg Grow, director of Agri-Business for Archer Financial Services Inc. in Chicago. For soybeans, ``a record global supply'' should provide a cushion against shortages, Grow said.

Corn futures for May delivery fell 20 cents, or 5.1 percent, to $3.745 at 11:51 a.m. on the Chicago Board of Trade. A close at that level would be the biggest percentage drop since Aug. 11. Prices, which have fallen 17 percent since reaching a 10-year high on Feb. 26, are down 7.1 percent this week and 4 percent for the quarter, which ends today. The exchange limits daily gains and losses to 20 cents for corn futures.

Soybean futures for May delivery fell 2.75 cents, or 0.4 percent, to $7.755 a bushel in Chicago, after yesterday closing at the highest this month. Prices reached $8.0775 on Feb. 22, the highest since June 2004, on speculation that U.S. farmers would plant less of the crop, and more corn. Prices are up 1.1 percent this week and 11 percent this quarter.

Expectations

Analysts in a Bloomberg survey expected a 12 percent increase in corn acreage to 87.94 million and an 8.4 percent decline in soybean plantings to 69.17 million. Farmers can earn as much as $200 per acre more from corn than soybeans.

Corn is the biggest U.S. crop, valued at a record $33.8 billion in 2006, with soybeans in second place, at $19.7 billion, government figures show.

The ``plantings report sets the stage for a rebuilding of depleted corn inventories and a subsequent reduction in corn prices during the fall of 2007,'' David Driscoll, an analyst for Citigroup Global Markets in New York, said in a report today.

Archer Daniels Midland

Driscoll reiterated his buy recommendation for Archer Daniels Midland, the world's biggest ethanol producer, who forecast corn prices will to fall to $3 a bushel in the fourth quarter.

Decatur, Illinois-based Archer Daniels rallied for a fourth day this week, rising 24 cents, or 0.7 percent to 37 cents a share as of 12:11 p.m. in New York Stock Exchange Composite trading. The stock has gained 16 percent this quarter.

Weakness in the corn market was exaggerated by the selling from commodity and hedge funds, said Shawn McCambridge, senior grain analyst for Prudential Financial Inc. in Chicago. There were more than 41,000 contracts to sell at limit down prices on the exchange's electronic trading platform at 10:45 a.m., according to Bloomberg data from the exchange.

Large speculators, who must report positions to the Commodity Futures Trading Commission, held 321,903 more long positions than short positions on March 20. Net-long positions reached a record 395,081 contracts on Feb. 27 after corn prices hit the 10-year high.

``We are seeing a major increase in acreage and that has encourage the funds to liquidate positions,'' McCambridge said.

Soybean prices fell on speculation that forecasts for record supplies of the oilseed in the U.S. and the world will cushion against any shortage caused by a drop in plantings this year, Grow said.

South American Soybeans

Soybean farmers in Brazil and Argentina, the two biggest producers after the U.S., will harvest a combined 101 million metric tons (3.71 billion bushels) and raise global inventories on Sept. 30 to a record 57.5 million tons, according to a USDA report on March 9.

Brazil's soybean crop will rise to a record 57 million tons, topping a February estimate of 56 million tons and the 55 million tons harvested a year ago, the USDA said.

Argentina's soybean production was estimated to rise 8.6 percent to 44 million tons from last year's crop of 40.5 million tons.

``The South American crops are getting even bigger so there is a large cushion of supplies to meet demand,'' Grow said.

A futures contract is an obligation to buy or sell a commodity at a set price for delivery by a specific date.

To contact the reporters on this story: Jeff Wilson in Chicago at jwilson29@bloomberg.net

Last Updated: March 30, 2007 12:31 EDT