Martin Hutchinson in Money Morning says that over the long-term oil and agricultural commodities are likely to deflate.

This is because, once the threat posed by the US housing crisis has passed, the Federal Reserve will be forced to increase interest rates to fight inflation. Other countries will follow, which will deflate the commodities boom.

However, over the short-term, gold, whose movements are directly linked to inflation, is likely to bounce. Martin reckons a price tag of $1,500 an ounce for the yellow metal is entirely possible. He recommends two ETFs and four gold miners to profit from this situation…

Wheat sank to its lowest price since August last year as US farmers began harvesting what is expected to be the biggest winter grain crop in a decade, reports Bloomberg:

Production will increase 17 percent from a year earlier to 1.78 billion bushels, the most since 1998, the U.S. Department of Agriculture forecasts. About 4 percent more acres were seeded from September to November, the agency said. Wheat prices have tumbled 45 percent from a record $13.495 a bushel on Feb. 27.

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This is the third installment of a new Money Morning series highlighting investment opportunities created by the global bull market in commodities. There’s a classic squeeze going on in the timber markets right now.

Not that it’s got a lot of publicity, but terrible things are continuing to happen to platinum production. That’s made me and Isabel pretty pleased! The platinum price is trending very nicely upwards.

Soft commodities are now the best-performing sub-set of the commodity bull market. It’s easy to see why. The world’s supply is withering.