COMMODITIES-Weak dollar helps boost Q4 start; natgas, softs lead

* Natgas up 5 pct, leading gains on cooler weather outlook
* Arabica coffee and raw sugar up about 3 pct each
* Gold hits near one-year high
* Optimistic view of commodities tempered by euro zone

By Barani Krishnan
NEW YORK, Oct 1 (Reuters) - Commodities closed up broadly
for a third day on Monday as prices adjusted to a weak dollar
after fourth quarter trading opened to nagging worries over
Europe.
Natural gas led gains with a 5 percent price jump,
hitting its highest level for 2012 and extending its winning
streak for a fifth day on forecasts of cooler U.S. weather
. Soft commodities such as arabica coffee and raw
sugar rose about 3 percent each.
Gold hit a near one-year high, with traders and
analysts citing both fund buying and possible central bank
demand for bullion caused by inflation concerns.
Brent crude oil closed down after an early rally set
off by positive U.S. manufacturing data fizzled on worries about
a looming recession in the euro zone and signs of economic
weakness in Asia.
Soybeans and grains such as corn and wheat
also fell on a record-fast harvest and reports of
larger-than-expected crop yields.
The Thomson Reuters-Jefferies CRB index, a bellwether
for commodity markets, settled up 0.6 percent. The 19-commodity
index has risen about 2.5 percent in all over the past three
sessions.
"I think it's more likely the dollar weakness," said Stephen
Briggs, a metal markets strategist in London for BNP Paribas,
offering a reason for the broadly higher finish.
The dollar fell from a three-week high against other major
currencies after data showed U.S. manufacturing expanded
unexpectedly in September for the first time since May as new
orders and employment picked up.
Since commodities are mostly traded in dollars, a weakening
of the currency usually triggers upward adjustments in price.
Commodities posted their biggest gain in nearly two years
during the third quarter as prices hit multi-month highs in
anticipation of bond-buying and other stimulus - later confirmed
- by central banks in the United States, Europe and China.

Prospects for capital flows into commodities look even
better for the current quarter after a U.S. judge knocked back
on Friday tough new rules to clamp down on excessive speculation
in raw material markets.
The decision by District Court Judge Robert Wilkins handed
an 11th-hour victory to Wall Street's biggest banks and angered
lawmakers concerned about high prices for gasoline and raw
materials. It is the second legal setback for regulators
struggling to implement sweeping reforms enacted after the 2008
financial crisis.
Despite such positive factors for the trade, commodity
dealers and analysts said prices could still fall in the fourth
quarter if sentiment about Europe worsened, causing the euro and
dollar to rally.
Concerns are running high about when, and not if, Spain will
request a bailout in exchange for the European Central Bank
lowering its borrowing costs.
Global factory data on Monday showed companies across the
world have yet to benefit much from the aggressive stimulus
spending undertaken recently by the world's major central banks.

Euro zone factories suffered their worst quarter since early
2009, suggesting the region may struggle to avoid recession.
Factory activity in China also contracted, indicating that
the world's No. 2 economy lost momentum for a seventh
consecutive quarter.

Prices at 6:05 p.m. EDT (2204 GMT)
LAST/ NET PCT YTD
CLOSE CHG CHG CHG
US crude 92.46 -0.02 0.0% -6.4%
Brent crude 112.13 -0.26 -0.2% 4.4%
Natural gas 3.480 0.000 0.0% 16.4%

US gold 1783.30 9.40 0.5% 13.8%
Gold 1775.64 -4.75 -0.3% 13.5%
US Copper 378.55 2.75 0.7% 10.2%
LME Copper 8299.50 94.50 1.2% 9.2%
Dollar 79.818 -0.117 -0.1% -0.4%

US corn 760.00 0.50 0.1% 17.6%
US soybeans 1563.00 -39.75 -2.5% 30.4%
US wheat 896.00 -16.25 -1.8% 37.3%

US Coffee 178.05 4.55 2.6% -22.0%
US Cocoa 2450.00 -66.00 -2.6% 16.2%
US Sugar 21.13 0.71 3.5% -9.0%

US silver 34.952 0.375 1.1% 25.2%
US platinum 1683.80 16.40 1.0% 19.9%
US palladium 645.60 4.80 0.7% -1.6%