Argentina's wheat production will slump by 30%, the Buenos Aires grains exchange said, warning that crops in later-reaped areas were not strong enough to make up for a poor start to the harvest.
The exchange said that recent days had brought some relief from the heavy rains which have slowed corn and soybean seedings, allowing farmers to make up for lost time.
Growers sowed 6% of their corn crops, reducing to 10 percentage points, or the equivalent of 340,000 hectares, the lag in plantings behind last year's pace.
In soybeans, farmers seeded 9.4% of the crop, equivalent to some 1.9m hectares, reducing the year-on-year delay to 9.6 percentage points.
However, damage already done to wheat crops, now being harvested, means that production now looked like coming in at 9.80m tonnes, some 320,000 tonnes lower than previously expected, the exchange said.
The first 42% of the harvest had yielded only "close to" 3m tonnes, implying a yield of less than 2 tonnes per hectare.
And while the outstanding areas to be harvested include some of the most productive farms, including those in south eastern Buenos Aires province, which may yield more than 4 tonnes per hectare, it would not be able to make up for the poor start.
Indeed, "during the past four weeks, yield expectations in this core wheat region have been gradually reduced, and currently fail to exceed or match the regional results over the last two campaigns", of 4.7 tonnes per hectare in 2010-11 and 4.8 tonnes per hectare last season, the exchange said.
The revision place the exchange estimate even further below that of the US Department of Agriculture, which on Tuesday kept at 11.5m tonnes its forecast for the Argentine crop.
However, the exchange's observations tally with those of many observers.
Separately, broker RJ O'Brien said that the Argentine wheat crop was "closer to 9m-10m tonnes", despite noting the prospect of the spread of combines to the most productive areas.
"Early harvest quality is below average," the broker said, noting low test weights and the presence of fungal residues.
"But yields are starting to improve as harvest advances with top-yielding areas still unharvested."
Argentina's wheat crop is being closely watched for its ability to boost low levels of wheat supplies in major exporting countries following disappointing harvests in the likes of the European Union and former Soviet Union, and with Australia's crop too expected to fall well short of initial expectations.
However, Argentina's government is widely rumoured to have cut to 4.5m tonnes, from 6m tonnes, its wheat export quota.
Earlier on Thursday, Paris-based analysis group Strategie Grains raised its estimate for European Union wheat exports in 2012-13 by 1.1m tonnes to 18.8m tonnes, citing "the reduction in projected Argentinean exports".
On Wednesday, analysts at FranceAgriMer said they were relying on imports of Argentine feed wheat to the EU to free up extra supplies of higher-grade French grain for shipment outside the bloc.
The extent of the drop in Argentina's harvest forecast by the Buenos Aires grains exchange, of 30%, reflects lower sowings as well as disappointing yields, with farmers turning this year to barley, claiming export restraints depress the returns available from wheat.
The exchange kept at 5.0m tonnes, its forecast for the Argentine barley harvest.
The USDA pegs the crop at 5.7m tonnes.