With the match being played just a day ahead of Blues' first team fixture against QPR, a youthful squad made the trip up to South Yorkshire.
Seventeen-year-old McFarlane's opener arrived after half-an-hour, but Wednesday claimed a share of the spoils in the U21 Professional Development League Two fixture with a late leveller.
Playing conditions at Wednesday's Middlewood Road training ground were difficult, with blustery wind causing problems for both sides. However after a tricky start, Blues started playing the ball around well and were rewarded with a goal.
Koby Arthur broke on the counter-attack for Blues, before playing a neat ball through to Chris Sutherland on the flank. Sutherland beat his marker before drilling a low pass across the front of the goal to the far post, where McFarlane was on hand to tap the ball in from close range.
Having fallen behind, Wednesday rallied and twice saw efforts cleared off the Blues goal-line before the break.
Blues emerged positively after the interval and fashioned a number of half chances of their own. But it was the Owls that made the next breakthrough with a 71st minute equaliser from Simon Hanna. The goal stemmed from a Blues error which allowed a cross to be sent in for Hanna, who was able to head home.
The Blues team was managed on the day by Academy coach Karl Hooper, who was extremely pleased with the way his young charges stuck to the task against a much more experienced Wednesday outfit.
"Wednesday had a much more experienced side out than us, with the likes of Gary Madine and David Prutton, but we coped very well with them," said Hooper.
"The game was made even more difficult by the windy conditions, but the boys showed great endeavour and team work.
"Once we started playing a lot of our football on the floor, we got joy from it and took the lead with a good goal.
"They came back at us, but the defence was well-marshalled by Darcy Blake and we went in at half-time one-nil up.
"We started the second-half well and put them under pressure and had one or two half chances ourselves, before they scored.
"But in the final 20 minutes we showed great spirit, considering a lot of them had played 120 minutes on Tuesday in the Birmingham Senior Cup. Although we had our backs to the wall a little bit, we defended really well and still looked a threat on the break."
Blues U21s: Callum Preston, Josh Cogley, Sam Deadfield, Reece Webb (c) (Charlie Cooper, 80), Darcy Blake (t), Nathaniel Kelly, Chris Sutherland (George McGee, 76), Liam Truslove, Kyle McFarlane (Reece Hales, 72), Chike Kandi (t), Koby Arthur.