* Soybean output seen rising with more acreage, better seeds
* Domestic corn to trade near global price without govt support Scope for improving yields if GMO technology embraced
* Higher ethanol production may flood market with DDGs
By Naveen Thukral and Niu Shuping
SINGAPORE/BEIJING, April 4 (Reuters) - Wang Zhonghai, a 49-year-old farmer in China's top corn producing province of Heilongjiang, plans to switch 80 percent of his land to cultivate soybeans this year as the government ends a near decade-old corn price support scheme.
China announced last week it will stop its corn stockpiling programme and allow markets to set prices - a move that should transform the agricultural landscape as farmers shift to more lucrative crops like soybeans, rice and peanuts.
Rising demand for a protein-rich diet in China has since 2001 triggered a six-fold jump in imports of soybeans, which are crushed to make soymeal, an animal feed ingredient, and cooking oil.
Higher output in China, the world's top soybean importer, will hit farmers in top producers Brazil, the United States and Argentina. The trio have presided over a soybean boom, helping nearly double world production over 15 years.
"We calculated and to grow soybeans would give better returns than corn which gives no profit after the price drop," said Wang, who has grown only corn on his 6.7 hectare (16.5 acre) farm for years in Hule village in Heilongjiang.
"Soy prices have picked up and with government soy subsidies, we may be able to make 700 yuan-800 yuan ($108-$124) per hectare," said Wang, adding that around a third of farmers in his village had plans to shift to soy.
Wang said farmers did not know what subsidies Beijing would provide instead of a guaranteed price if they grew corn, but he was confident corn prices would fall.
In 2016, China's soybean output is expected to rise by up to 2 million tonnes and increase faster in future years with improved seed technology and a bigger acreage, analysts and traders said.
"Many farmers plan to shift to grow rice and peanuts, about 10 percent of the farmland would be shifted to soybean," said Wang Fuqing, head of the Hule Modern Agricultural Machinery Cooperative.
China's support for corn saw the area under cultivation hit 37 million hectares last year, up from 23 million hectares in 2001, according to U.S. Department of Agriculture data.
In contrast, soybeans was grown on 6.8 million hectares in 2015, down from 9.3 million hectares 15 years ago.
"We know that soybeans and corn compete for acreage, so China's support for corn prices pushed all those soybean acres into corn as it made more profit to grow corn," said Adam Davis, head of commodities at Merricks Capital, a Melbourne-based agricultural fund.
"If it goes back to free market you could certainly see acreage go back to soybeans."
Farmers are expected to make a bigger shift next year as corn falls nearer international prices. Corn has traded at an almost 50 percent premium to world prices in China.
A shift of one to two million hectares to soybeans from corn would be the equivalent of a month's soybean imports for China, said Ken Morrison, a former Cargill executive who publishes a commodity newsletter.
"I think the attention to the impact on global corn is overdone, and I think the attention to the implications of what it will mean to Chinese soybean production is under appreciated," Morrison said.
China, which ended price support for cotton in 2014, is forecast to see cotton acreage decline to 3.4 million hectares in 2015/16 from 5.5 million hectares in 2011/12, USDA data shows.
Cotton imports have dropped while the gap between international and domestic prices has narrowed since Beijing stopped paying prices well above the global market.
There could also be scope to improve soybean yields, including by using genetically modified organisms. Though Beijing has been cautious so far, ChemChina's $43 billion purchase of Swiss seeds and pesticides company Syngenta could bring Chinese planting of GMO soybeans closer.
China produces 1.8 tonnes of soybeans per hectare, well below the 3.2 tonnes of output in the United States.
Boosted by GMOs, annual global soybean output has jumped nearly two-and-half times to 319 million tonnes since 1980.
FLOOD OF DDGs
A move to liquidate massive corn stockpiles will also disrupt meal and vegetable oil trading in China and Asia, said grains analyst Roy Huckabay at Chicago brokerage the Linn Group.
China is sitting on close to 250 million tonnes of corn, enough to fill Beijing's Bird's Nest stadium around 34 times.
If lower quality grain from state reserves is processed for ethanol, the market would be flooded with byproduct distillers dried grains with solubles, he said.
Some farmers were taking a cautious approach before switching crops, said a local government official at Tailai county in Heilongjiang.
"Many farmers are holding a wait-and-see attitude because some are still hoping that corn prices may rise again and they are waiting to see how much subsidy the government offers." ($1 = 6.4646 Chinese yuan renminbi) (Additional reporting by Tom Polansek and Karl Plume in CHICAGO; Editing by Ed Davies)