The government blamed drought for the downturn. Argentine agriculture suffered from dry weather most of 2012 but some relief was seen after February rains.
Argentina's earnings projections are far from clear because of the reported setback to timely irrigation.
Trading on the International Exchange in Chicago is mixed because of poor crop results from across South America and the United States. Soybean futures were supported by reports of long delays at Brazilian ports and mixed weather elsewhere in South America, including major exporter Argentina.
The Rosario Chamber of Commerce in Santa Fe province estimated Argentina will produce 48 million tons of soybeans in the 2012-13 season.
"There is at least a million tons reduction against previous forecasts," Agriculture.com reported on its website.
Lack of water supplies the first week of February affected central and northern Argentina, including Buenos Aires, Cordoba and Salta provinces.
Rosario's estimate is at least 9.4 percent below an earlier estimate of Argentina's 2012-13 harvest, which put the yield at 53 million tons. Analysts said that estimate had already been revised downward as drought persisted in January, so the 1 million-ton loss cited after Rosario's estimate is closer to the reality of Argentina's agriculture woes.
The Buenos Aires Cereals Exchange continues to predict a higher yield of up to 50 million tons. Those projections are yet to be substantiated.
Rains improved conditions in the Chaco province but recovery from the water shortfalls is yet to be fully measured.
"For the ones who are land renters and soybean producers, the year will be tough," Agriculture.com said.
Drought also affected yields of corn and other agricultural crops, including energy feedstock.
Meteorological experts warned last year of the impending weather vagaries and agriculture data analysts called for contingency measures but response from regional governments has been slow.
Argentine President Cristina Fernandez de Kirchner is facing rebellious factions within usually loyal echelons of the political establishment. Protests over government policies paralyzed central Buenos Aires sporadically last year.
Oil World forecasting service, which has headquarters in Hamburg, Germany, said Argentine and Brazilian grain and oilseed production prospects deteriorated in recent months.
It said, "There is now a higher risk that initial estimates of a sharp increase in soybean production by 36 million tons or 13 percent will not fully materialize, partly because the anticipated increase in the area will not be accomplished," Oil World said on its website.
Earlier in the season very heavy rainfall led to soybean planting delays in several major areas of Argentina as well as southern Brazil, Oil World said.
Traders say uncertainty over Latin American harvests may increase international market dependence on U.S. suppliers, especially for soybeans.
Brazil is the second largest producer of soybeans followed by Argentina. The United States maintains the lead in soybean production but weather conditions have affected some U.S. crops as well.