Rain is expected in Argentina's drought-stricken grains belt over the coming days, but farmers fear it could be too late to avert crop losses that threaten to erode exports and government finances. Argentina is the No. 2 global corn exporter and the No. 3 supplier of soybeans. So recent weeks of unforgiving Southern Hemisphere summer sun, intensified by dryness caused by the La Nina phenomenon, have raised concern about world food supplies.

"The sun has been punishing. We've lost at least 20 percent of our corn," said Marta Novocourt, who helps run a family farm in the town of Carlos Casares, Buenos Aires province.

U.S. soybean futures were meanwhile brought lower by forecasts of storms moving into the vast Pampas farm belt. "There's a high probability of rains, starting on Saturday and lasting through Tuesday," a weather report from the state-run National Institute for Agricultural Technology (INTA) said.

"The showers will be geographically widespread and will vary in intensity," INTA said, predicting that rains will hit parts of Buenos Aires, Cordoba and Santa Fe provinces. Soybean futures on the Chicago Board of Trade

fell on Friday, pressured in part by wet forecasts for Argentina and southern Brazil. As of 11:04 a.m. CST (1704 GMT), CBOT March soybeans were down 10-1/2 cents at $11.86-1/2 a bushel. The Buenos Aires Grains Exchange said on Thursday that a storm front would dump more than 100 millimeters (3.9 inches) of rain in some parts of the Pampas over the week ahead.

But the moisture will come too late for many corn fields as hope fades for Argentina to help replenish global supplies depleted by a lackluster U.S. harvest. Soy has suffered as well. The heat wave will add to government fiscal challenges this year as Argentina faces fallout from a sluggish world economy and Europe's financial meltdown. "The drought is very bad news for the government's finances, which are largely dependent on agriculture export tariffs, and the central bank, which was looking forward to the harvest in order to replenish its international reserves," said Walter Molano, who analyzes Argentina for U.S.-based BCP Securities.

Buenos Aires-based consultancy Finsoport says Argentina's farm exports in the 2011/12 crop year will total $26.3 billion, down 12 percent from forecasts made before the drought. The government will lose more than $1 billion in revenue as a consequence, it said.

The Agriculture Ministry on Thursday trimmed its estimate of the area to be planted with 2011/12 soy to 18.8 million hectares from 19 million previously. But it is corn, which has a shorter and more delicate flowering period, that has really suffered.

The ministry said corn yields could be slashed by 20 percent to 50 percent due to the heat wave, which is related to La Nina, an abnormal cooling of waters in the equatorial Pacific Ocean that affects weather patterns and threatens to upset commodity markets from soy to coffee.

The U.S. Department of Agriculture (USDA) expects Argentina to produce 50.5 million tonnes of soy and 26 million tonnes of corn in the 2011/12 season. Other analysts are betting that this season's corn crop will come in under the record 23 million tonnes produced by Argentina in 2010/11.

President Cristina Fernandez, who started her second four-year term last month after an easy October re-election, has had a troubled relationship with the farm sector. Growers complain about her heavy-handed intervention in the market, including corn export curbs and a whopping 35-percent tax on soy exports.

But tempers have cooled since Fernandez's government was rocked in 2008 by massive farm protests over her tax policies and the agriculture minister met with growers this week to discuss possible aid programs to soothe the drought's impact.

(Additional reporting by Maximiliano Rizzi; Editing by Lisa Shumaker)