Any guesses as to who will get blamed for this one?

Gertz:

New wheat disease detected

The United Nations Food and Agriculture Organization (FAO) warned in March that Iran had detected a new highly pathogenic strain of wheat stem rust called Ug99.

The fungal disease could spread to other wheat producing states in the Near East and western Asia that provide one-quarter of the world's wheat.

The FAO warned stated east of Iran -- Afghanistan, India, Pakistan, Turkmenistan, Uzbekistan, and Kazakhstan to be on high alert.

Scientists and international organizations focused on controlling wheat stem rust have said 90 percent of world wheat lines are susceptible to Ug99. The situation is particularly critical in light of the existing worldwide wheat shortage.

The fungus causes dark orange pustules on stems and leaves of infected plants. The pustules can completely girdle stems, damaging their conducting tissue and preventing grain fill. Yield losses may reach 70 percent, while some fields are totally destroyed. If stem rust arrives early in the growing cycle, losses are higher. Spores released by the fungal pustules are spread by the wind and may travel great distances in storms.

Word of the new wheat disease comes amid global shortages of rice and wheat resulting from typhoon-related flooding in Java, Bangladesh, and India and from agricultural pests and diseases in Vietnam. Last year Australia suffered its second consecutive year of severe drought and a near complete crop failure, heavy rains reduced production in Europe, Argentina suffered heavy frost, and Canada and the U.S. both produced low yields.

Food riots have broken out in Egypt, Haiti and several African states, including Mauritania, Cameroon, Cote d'Ivoire, Burkina Faso and Senegal in recent months.

Time for a Wheat/Corn/Soy OPEC?

OK... so what about production... where is it?

Nations East of Iran get the warning....look out India, and China..we're shifting somewhat to corn, but that clearly leaves the democratic west as the largest producers of export wheat

Worldwide, wheat supplies are somewhat tight, but for a variety of reasons:
1) The European Union-27 (EU-27) is expected to be the world's largest wheat producing region in 2007/08, increasing wheat production to 127 million tons, only a 2-percent increase from the drought-stricken crop in 2006/07. The expansion of rapeseed area to supply biodiesel limited the rebound in wheat plantings. Moreover, the growing season so far has been far from ideal.
2) China is expected to be the second-largest wheat producer in 2007/08 reaching 100 million tons, a 3-percent decline from the previous year. Area planted is reported down slightly as wheat returns and government payments were not enough to maintain area. Dryness has been reported in some regions and growing conditions so far have not been as good as a year ago.
3) Wheat production in the former Soviet Union (FSU-12) is forecast at 92 million tons in 2007/08, up 7 percent from a year earlier. Fall planting conditions were much better, facilitating a rebound in winter wheat plantings in Ukraine and parts of Russia. However, the strong exchange rate and increased input costs have limited the profitability of wheat production.
4) India is projected to produce 74 million tons in 2007/08, up 6 percent from a year earlier. High wheat prices encouraged a 5-percent increase in area and growing conditions have been mostly favorable.
5) Canadian planting intentions surveys indicate a sharp drop in sowings of Canadian western red spring wheat, more than offsetting a planned increase for durum. Canola and barley are expected to offer better returns than wheat. Moreover, winter wheat seedings in eastern Canada dropped sharply due to cold wet planting conditions last fall.
6) Argentina's 2007/08 wheat production is projected to decline 10 percent to 12 .8 million tons due to a decline in expected planted area. The Government restricted export registrations in 2006/07 in order to limit internal flour price increases and thus, reduced producer planting incentives for 2007/08. Moreover, a program to subsidize wheat production appears to have been ineffective.
7) Australia is expected to rebound from devastating drought in 2006/07, more than doubling wheat production to 22 million tons in 2007/08.

Summary:
While the there is a strong demand for US wheat from food, feed, and exports, there is also a problem in producing the crop. Some early season damage from freezing temperatures and some late season problems with crop diseases will create crop quality problems. With more acreage planted a year ago, supplies should be sufficient to meet the demand, but still keep wheat prices in the mid to upper $4 range according to USDA and the outlook specialists.