June 26 (Bloomberg) -- Corn surged to a record for the ninth time this month and soybeans rose on speculation that the Federal Reserve will fail to keep inflation in check, boosting investor demand for commodities as a hedge.

Billionaire Warren Buffett, chairman of Omaha, Nebraska- based Berkshire Hathaway Inc., said yesterday he is concerned the U.S. will be mired in ``stagflation'' as the economy slows and inflation accelerates. The Fed, after seven interest-rate cuts since September, yesterday left the benchmark rate unchanged and said ``upside risks'' to prices have picked up.

``The man from Omaha provided a green light to investors to pile back into commodities,'' said Greg Hunt, a market analyst for Fox Investments, a division of MF Global Ltd. in Chicago. ``Buffett's stagflation comment was like a switch to buy commodities and sell stocks.'''

Corn futures for December delivery rose 23 cents, or 3 percent, to $7.88 a bushel on the Chicago Board of Trade, after earlier rallying the 30-cent daily limit to a record $7.95. The price more than doubled in the past year as global reserves were forecast to reach a 24-year low on Aug. 31.

Soybean futures for November delivery rose 36.5 cents, or 2.4 percent, to $15.615 a bushel in Chicago, the biggest percentage gain since June 11. The price rose 93 percent in the past year, reaching a record $15.865 on March 3.

Commodity Rally

The Reuters/Jefferies CRB Index of 19 commodities jumped as much as 2.5 percent to a record 463.41. The index gained 49 percent in the past year as crude oil doubled to its highest ever. Eight of the commodities rose more than 50 percent over the past 12 months, including wheat, cocoa and natural gas.

Gold surged the most in almost two years today and crude oil rose as much as 4.3 percent to a record $140.39 after the Fed kept the U.S. benchmark interest rate at 2 percent. The U.S. Dollar Index fell to a two-week low, boosting demand for raw materials as an alternative asset.

Corn and soybeans also rose on concern that additional rainfall in the U.S. Midwest will hurt crops, compounding damage from the worst floods since 1993.

More than 4 inches of rain (10 centimeters) fell overnight and early this morning in parts of Iowa, the biggest corn- and soybean-producing state, said Mike Tannura, a meteorologist for T-Storm Weather in Chicago. The rest of the region may get as much as 3 inches of rain in the next five days, slowing crop development and stalling late planting, Tannura said.

Replanted

About 11 percent of Iowa's corn acreage will be or needs to be replanted this year, equal to 1.4 million acres of the 12.6 million farmers said they intended to plant, the USDA said June 23. About 12 percent, or 1.176 million acres of soybeans will be need to be replanted because of flooding.

``Grains rose in response to heavy rains and more in the forecast,'' said Dave Marshall, a farm marketing adviser for Toay Commodity Futures Group LLC in Nashville, Illinois.

Corn is the biggest U.S. crop, valued at a record $52.1 billion in 2007, with soybeans in second place at $26.8 billion, government figures show.

To contact the reporter on this story: Jeff Wilson in Chicago at jwilson29@bloomberg.net.

Last Updated: June 26, 2008 16:35 EDT