Loose smut of wheat is

✅ Explanation: Loose smut of wheat, caused by the fungus Ustilago tritici, is indeed an internally seed-borne disease. The fungal spores infect the developing wheat seed embryo during flowering. When the infected seed germinates, the fungus grows systemically within the plant, eventually replacing the grain heads with masses of black spores.

📌 Other Options Explanations:
Externally seed borne Covered smut of barley (caused by Ustilago hordei)