Many of Australia's productive agricultural regions have been hit by the the driest June on record.
Rabobank's Agribusiness Monthly report says wheat yields have been downgraded in cropping regions in Western Australia, South Australia and northern NSW.
Large parts of NSW and southern Queensland didn't get any rain in June and grain growing regions in South Australia and Victoria received only one to five millimetres.
The West Australian wheatbelt received just 5 to 15 millimetres of rainfall in June, "too little, too late" for some crops in the north.
"Yield downgrades for parts of the Western Australian, South Australian and northern NSW cropping zones are being factored in and even areas with previously excellent prospects such as the Riverina of NSW now face moisture deficits," Rabobank said.
"Rain is required urgently across the country's key grain growing regions, mostly in WA, where some crops are starting to die from lack of moisture."
Rabobank said Australian wheat prices had followed US wheat prices higher, but had mostly improved as expectations for the new harvest were reduced.
Dry conditions are also affecting the beef sector.
If forecasts for dry weather from July to September eventuate in south-eastern Australia, more cattle are expected to come onto the market as farmers reduce stock, which may see prices ease.
But a current cattle shortage is expected to protect the market from a sudden, significant price drop, and prices should remain at high levels.
Rabobank said total beef exports for June are on par with 2016 levels.
Live export numbers for the year to May are down 35 per cent, reflecting the shortage in supply.
Meanwhile, the strength of the Australian dollar against the currencies of other "new world" wine producers is hindering returns from wine exports.
Although the Australian dollar has slipped considerably against the US dollar since 2011, its rise against the currencies of countries such as Chile, South Africa and New Zealand has put local producers at a disadvantage.
"The Australian industry will be hoping that countries like Argentina and South Africa get their houses in order and rebuild currency strength in coming years to improve the playing field," Rabobank said.