WINNIPEG (Dow Jones)--The grain and oilseed market analysis division of
Agriculture and Agri-Food Canada's  upwardly revised 2008/09 Canadian canola
production estimate has analysts split as to whether the latest forecast is
realistic.

  Total 2008/09 canola output was pegged by AAFC on Aug. 1 at 10.60 million
metric tons, up from the July 2 estimate of 10.10 million tons, while the yield
forecast was raised to 26.76 bushels per acre from the July 2 estimate of 25.49
bushels.

  Ken Ball, a Winnipeg-based broker with Union Securities Ltd., said he was
surprised by the new AAFC number, which he found to be "on the optimistic
side."

  Some canola fields in Alberta are still struggling and even though the
Saskatchewan crop has generally improved, it is still only in fair condition,
he said.

  The large amount of land seeded to canola in Western Canada this spring
encouraged high production estimates even though bumper crops were not
expected, according to Ball.

  However, he still only pegged total output closer to 10.00 million tons
despite higher acreage.

  In 2008/09, farmers seeded a record 15.812 million acres to canola versus
14.726 million in 2007/08.

  Mike Jubinville, analyst and president of agriculture advisory service
ProFarmer Canada, also found the latest AAFC figure too high.

  "Saskatchewan Agriculture pegged their production near 4.5 million tons and
that province typically accounts for roughly 45% of total Canadian production.
If I extrapolate from that, I come up with 9.8 million tons," he said.

  An estimate of 10.6 million tons assumes yields will be stellar and that
seems highly unlikely this year, Jubinville said.

  "On balance, I think we have an okay crop but no better and assuming that,
there is no way we'll see that much production," he continued.

  However, Daniel Holman, grain merchant with North West Terminal in Unity,
Saskatchewan, said the the AAFC number was not unrealistic as weather
conditions were generally favorable in July and acreage seeded to canola rose
significantly this year.

  "Even though we had some emergence problems this spring, if you walk out into
a canola field right now you'll find that the crop has progressed well," he
said. "Canola seems to compensate very well."

  Also, "if you add another bushel or two onto 15.812 million acres that is
quite a bit," he added.

  According to the Canadian Canola Council's last crop report for the period
ended July 30, canola fields in many parts of west central Alberta and
northeastern Saskatchewan were still a week to 10 days behind average and in
need of heat.

  Moisture conditions ranged from excessive in Manitoba to critically dry in
the central and western areas of the Peace region of northern Alberta, while
many regions had also experienced hail damage, the report said.