The Ponte de Lima stage - which suffered from forest fires last night - was again struck by fire on the morning's first stage, which was cancelled.
That in-turn forced its cancellation for the re-run in the afternoon.
Latavala maintained his momentum from the morning, managing second on the Caminha test before winning the final stage of the day by 2.8s to extend his lead over Citroen's Kris Meeke.
Jari-Matti Latvala beats Sebastien Ogier to claim win in Portugal
Fresh from claiming his maiden WRC victory on Rally Argentina, Meeke remained competitive all afternoon, and kept himself in contention, despite admitting to taking the wrong tyres for the afternoon tests.
Andreas Mikkelsen holds third, without matching the stage-winning pace he showed this morning.
His team-mate Sebastien Ogier, however, fought his way to victory on SS6 to initiate his charge towards the front.
Despite sweeping the road in difficult conditions, plus suffering a puncture earlier, Ogier managed to move up to sixth, 25.9s behind Latvala with his road-sweeping duties relieved tomorrow.
The new Fiesta continued to benefit Ott Tanak, despite failing on his team-mate Elfyn Evans in the morning.
Tanak helped himself to two third-placed stage finishes to jump Dani Sordo into fourth overall.
Many drivers complained about how rough the stages were over the afternoon, and tyre choice will play a huge part in tomorrow's result.
AUTOSPORT Race Centre Live coverage of the Rally of Portugal resumes from 8.50am UK time on Saturday
LEADING POSITIONS AFTER SS7
Ogier closes on Latvala in Portugal
Rally Portugal stage cut due to fires