* Front-month prices see worst quarter since 2012

* USDA pegs 2014 cotton acres up 9 percent year/year

* Texas rain, USDA report raise expectations of higher U.S. output

NEW YORK, June 30 (Reuters) - Cotton futures dropped to their lowest since December 2012 on Monday after the U.S. government raised its outlook for domestic cotton plantings, heightening expectations for a big boost in supplies in the world's top exporter in the 2014/15 crop year.

The most-active December cotton contract on ICE Futures U.S. sank as low as 73.30 cents a lb after the report before finishing down 1.34 cents, or 1.8 percent, at 73.51 cents a lb.

It was the contract's biggest one-day rout in a month.

The spot July contract ended the day down 1.68 cents, or 2.1 percent, at 79.21 cents a lb in thin trade, finishing the first half of 2014 down 6 percent and the second quarter down 15 percent.

That was the front-month's worst quarter in two years, seen as worries over tight U.S. inventories at the end of the 2013/14 crop year have given way to expectations of large, fresh supplies on their way in the world's top exporter.

The U.S. Agriculture Department (USDA) plantings report on Monday added to the bearish expectations. The agency pegged 2014 plantings at 11.37 million acres, up more than anticipated from a March forecast of 11.10 million acres.

The revised report represents a 9-percent jump from 2013, when farmers shifted cotton acres to more lucrative grains crops.

"It doesn't take a genius to see this crop is going to get bigger," said Jobe Moss, a broker with MCM Inc. in Lubbock, Texas.

The USDA earlier this month pegged the 2014/15 production outlook at 15 million bales, but expectations are rising of significantly higher output after Texas received much-need rains at key times this season.

British merchant Plexus Cotton Ltd last week said production could be as high as 17.7 million bales. (Reporting by Chris Prentice; Editing by Chizu Nomiyama )