Commodities Daily: Rebuilding & Global Growth Back On (FCX, NEM, IVN, TCK, RIO, TM, HMC, GLD, SLV, GDX, GDXJ, SIL, GIS)

Time now for our daily look at commodity prices and news. Copper prices rose to their highest level in nearly three weeks as the estimated cost to rebuild quake-devastated areas of Japan have come in at north of $300 billion. Copper miners Freeport-McMoran Copper & Gold Inc. (NYSE: FCX), Newmont Mining Corp. (NYSE: NEM), and Ivanhoe Mines Ltd. (NYSE: IVN) all gained between 2.5% and 5% on expectations of increased demand.

Not every miner was so bullish, though. Teck Resources Ltd. (NYSE: TCK) has cut its full-year sales outlook for both coal and copper. The cut in its copper output was blamed on a labor dispute in which miners have rejected a new five-year collective bargaining agreement and are continuing their strike. Teck has also had trouble getting its metallurgical coal to market due to disruptions to rail service and one of its export terminals in Canada.

Aluminum prices could also be in for a price rise, according to Tom Albanese, CEO of Rio Tinto plc (NYSE: RIO).  Because aluminum smelting and refining requires an enormous amount of electricity, Albanese thinks that the recent wave of smelter-building is reaching an end because there are few places left to build facilities where a sufficient supply of electricity is available.

In Japan, aluminum plants in the western part of the country are unaffected by power shortages, but a few plants in the east are subject to rolling blackouts. That’s not much of difference-maker because demand for aluminum from car makers like Toyota Motor Corp. (NYSE: TM) has dropped. Among Toyota, Nissan, and Honda Motor Corp. (NYSE: HMC) production is likely to fall by an estimated 200,000 units.

Gold futures closed at a record $1,438/ounce and silver has set a new 31-year high, closing at $37.29. The SPDR Gold Shares ETF (NYSE: GLD) rose about 1%, and the iShares Silver Trust ETF (NYSE: SLV) rose about 2.6%. The Market Vectors Gold Miners ETF (NYSE: GDX) and the Market Vectors Junior Gold Miners ETF (NYSE: GDXJ) both rose by about 3.6%. The Global X Silver Miners ETF (NYSE: SIL) rose nearly 5%.

Mining for gold is a good business these day, and China now thinks it wants to expand its gold mining beyond its own borders. China Gold International Resources Corp. Ltd., which is 42% owned by state-owned China Gold Corp., is looking to acquire mines in Russia and Mongolia. A company spokesman told Reuters that China Gold Corp. is looking to buy five or six properties.

On the food front, General Mills (NYSE: GIS) reported fiscal third-quarter EPS of $0.59 on sales of $3.65 billion, beating EPS estimates of $0.56 and posting sales pretty much inline with expectations. The company has already raised prices for some of its food in the US, and those increases have hurt the company’s sales overall.

US farmers are expected to plant more acreage this year, particularly in corn and wheat. Prices are expected to stay high though, due to increased demand. The US Department of Agriculture will issue its next acreage forecast on March 31st, and that will offer a more accurate measure of crop projections.

Paul Ausick