April 2 (Bloomberg) -- Corn plunged by the exchange-imposed limit for a second day as U.S. farmers plan to sow the most acres since World War II in response to increased demand for the grain to make alternative fuel and supply livestock feed.

The biggest two-day fall in more than a decade followed a report by the U.S. Department of Agriculture on Friday showing farmers plan to sow 90.5 million acres (36.6 million hectares) of corn this spring, 15 percent more than last year, the most since 1944 and above analysts' estimates.

Farmers hope to take advantage of corn prices, which have risen 50 percent in the past year and reached a decade-high in February due to record production of ethanol, used as a substitute or additive to gasoline. Ethanol is made from corn in the U.S. by companies such as Archer Daniels Midland Co.

``The USDA report weighed on prices and things were amplified by the size of the long positions in the market,'' Tobin Gorey, commodity strategist at Commonwealth Bank of Australia Ltd., said by phone from Sydney. Long positions are bets that prices will rise.

Corn futures for May delivery fell 20 cents, or 5.3 percent, to $3.545 on the Chicago Board of Trade and stayed locked at that level in after-hours trading at 3:52 p.m. in Singapore. It was the biggest two-day loss since June 1996.

``The strong grains rally will stop for now. Going through the northern hemisphere harvest, prices may come down barring weather factors,'' Gorey said.

Bumper Harvests

The increased acreage signals this year's U.S. corn production may rise to a record, topping the previous peak of 11.8 billion bushels in 2004, analysts said. The U.S., the biggest producer and exporter of corn, harvested 10.535 billion bushels of corn last year, the third-largest crop ever.

This year's planned corn acreage in the U.S. compares with 78.3 million acres planted last year, and it was 3 percent higher than the 87.9 million acres predicted by 22 analysts in a survey compiled by Bloomberg.

The surge in corn prices in the past year has raised costs, not only for ethanol producers, but also for meat processors including Tyson Foods Inc. and Smithfield Foods Inc. Prices of other crops, such as soybeans, have also gained as farmers switch acreage to corn. Feed wheat can replace corn in livestock feed.

Wheat has surged 25 percent in the past year, half the gain in corn, which is traditionally a cheaper livestock feed.

Dalian Declines

Wheat futures for May delivery fell 10.75 cents, or 2.5 percent, to $4.2725 a bushel at 3:51 p.m. Singapore time in after-hours dealing on the Chicago Board of Trade. Prices of wheat have dropped 20 percent from a 10-year high of $5.57 a bushel on Oct. 17 after U.S. growers boosted planting.

Soybean prices dropped even after the U.S. government report said plantings may fall 11 percent to 67.1 million acres. Soybean futures for May delivery fell 0.6 percent to $7.5675 a bushel at 3:54 p.m. Singapore time.

Corn prices in China, the world's second largest grower of the grain, also fell as traders speculated a further drop in global markets may prompt domestic users to import the grain.

The contract for delivery in September on the Dalian Commodity Exchange slumped as much as 3.4 percent to 1,630 yuan ($211) a ton, and settled at 1,654 yuan.

``Domestic corn is much cheaper for now, but if prices keep falling, imports will become an option for large users,'' said Nie Ben, research manager at Liao Ning Cifco Futures Co. in Dalian. ``So far the reaction has been more psychological.''

In Japan, all corn futures, except the front-month delivery, fell 500 yen ($4.25) a metric ton, the daily maximum allowed by the Tokyo Grain Exchange.

``A decline in corn prices in Chicago affected the Tokyo market,'' Hiroyuki Kikukawa, an official of Nihon Unicom Inc., said.

To contact the reporters on this story: Feiwen Rong in Singapore at frong2@bloomberg.net William Bi in Beijing at wbi@bloomberg.net

Last Updated: April 2, 2007 04:01 EDT