* Corn falls daily 40-cent price limit
    * Wheat down most since Sept 2011; soy drops most in 6 mths
    * USDA pegs corn, soy stocks larger than analyst estimates

 (Updates U.S. market activity to close, adds analyst quotes)
    By Michael Hirtzer
    CHICAGO, March 28 (Reuters) - U.S. corn futures dropped more
than 5 percent for their biggest daily loss since May on
Thursday after a government crop report showed the stockpile of
the grain larger than analysts expected.
    Wheat futures fell the most in about 1-1/2 years and
soybeans the most since September in the wake of the U.S.
Agriculture Department's annual plantings and quarterly stocks
reports.
    USDA surprised traders with forecasts for old-crop corn
supplies, estimating the stockpile at the lowest in nine years,
up from the average estimate of the lowest in 15 years.
    The government also said farmers would plant the most corn
acres since 1936 and the fourth largest soybean area ever.
    
    "I don't think that corn acres are bearish... it's the
stocks report the trade can't get around because it was so big,"
said Mike Zuzolo, analyst at Global Commodity Analytics.
    Chicago Board of Trade corn futures for May delivery 
fell their daily 40-cent trading limit in the minutes following
the report's release at midday, ending at $6.95-1/4 per bushel.
    Corn settled at the lowest level in three weeks after prices
notched a seven-week high on Thursday. Futures shed more than 3
percent in the month and ended the quarter roughly unchanged.
    USDA pegged corn stocks as of March 1 at 5.399 billion
bushels, above the average analyst estimate of 5.013 billion
bushels. Soybean stocks were estimated at 999 million bushels,
above trade guesses of 935 million bushels. 
    "The corn stocks were off-the-charts bearish... stocks
numbers undeniably bearish all around," said ABN Amro analyst
Charlie Sernatinger.
    CBOT May soybeans settled 49 cents, 3.4 percent, lower
at $14.04-3/4. Soy lost 5 percent in March and about 1.3 percent
in the first quarter of 2013.
    The government estimated soy seedings at 77.126 million
acres (31.2 million hectares), compared with average estimates
of 78.394 million acres, which would have been the most ever.
    USDA estimated corn plantings at 97.3 million acres, just
above estimates of 97.252 million acres.
    The government surveyed 83,500 farmers for the report,
considered one of the most important crop forecasts of the year.
    Growers were expected to increase overall seedings after the
worst drought since 1934 last summer reduced yields and sent
corn and soybean futures to a record last year. But the higher
prices also reduced demand.
    Corn use as animal feeding had its biggest quarterly drop
ever on a percentage basis, according to CHS Hedging Inc analyst
Tim Emslie. 
    "We're obviously seeing the outcome of diminished demand.
The higher prices really did more damage to demand than people
wanted to believe and that has left us with a higher stocks
number," said Citigroup futures specialist Sterling Smith.
    Plantings of all varieties of U.S. wheat were estimated at
56.4 million acres, up 1 percent from last year, while stocks of
wheat were up 3 percent from a year ago.
    Benchmark CBOT May wheat fell 6.7 percent, or 49
cents, to $6.87-3/4 per bushel. Wheat lost more than 2 percent
in March and nearly 12 percent in the quarter for the second
straight quarterly decline.
    
 Prices at 2:38 p.m. CDT (1938 GMT)      
                              LAST      NET    PCT     YTD
                                        CHG    CHG     CHG
 CBOT corn                  695.25   -40.00  -5.4%    7.5%
 CBOT soy                  1404.75   -49.00  -3.4%   17.2%
 CBOT meal                  404.60   -18.50  -4.4%   30.8%
 CBOT soyoil                 50.11    -0.71  -1.4%   -3.8%
 CBOT wheat                 687.75   -49.00  -6.7%    5.4%
 CBOT rice                 1536.00     3.00   0.2%    5.2%
 EU wheat                   238.50    -8.25  -3.3%   17.8%
 
 US crude                    97.10     0.51   0.5%   -1.8%
 Dow Jones                  14,578       52   0.4%   19.3%
 Gold                      1596.20    -8.53  -0.5%    2.1%
 Euro/dollar                1.2823   0.0043   0.3%   -0.9%
 Dollar Index              82.9490  -0.2720  -0.3%    3.5%
 Baltic Freight                910      -12  -1.3%  -47.6%
    

 (Additional reporting by Mark Weinraub and Julie Ingwersen in
Chicago, Colin Packham in Sydney and Gus Trompez in Paris;
Editing by Marguerita Choy and Sofina Mirza-Reid)