Other commodities markets mostly declined, with energy, other agricultural futures and metals moving lower.
Wheat supplies in the U.S. have dwindled this year as one wheat crop after another around the world has been damaged by poor weather, most recently in Australia and Argentina. That's sent buyers scrambling for stockpiles at any cost. U.S. wheat exporters already have sold more than 90 percent of the 1.175 billion bushels the U.S. Department of Agriculture expects will be exported during the whole marketing year, which ends in June 2008.
Wheat prices crossing the $10 a bushel threshold won't immediately translate into a spike in retail prices for bread, cereal, cookies and other products, experts say. That due partly because companies like Kellogg Co., General Mills Inc., ConAgra Foods Inc. and Kraft Foods Inc. typically protect themselves from price volatility with long-term supply contracts. But analysts say consumers should expect that higher wheat prices will eventually work their way into the grocery aisle.
A bushel of wheat for March delivery surged to a record $10.095 on the Chicago Board of Trade early in the day before shedding 13.5 cents to settle at $9.66 a bushel as profit-taking set in. Wheat prices have hit a record high each of the past three trading sessions and have doubled since the start of the year, when wheat traded for about $5 a bushel.
Food prices rose at a 4.1 percent annual rate in the three months ended in November largely due to higher milk, egg and meat prices, according to the Labor Department's latest index of consumer prices. Wheat, corn and soybeans are used to feed livestock; as those costs go up, so does the retail cost to consumers.
White bread is up 10 cents to $1.24; cheddar cheese is up 48 cents to $4.47 a pound; and eggs are up 51 cents a dozen, reports CBS News correspondent Cynthia Bowers. But it is the price of milk that is really getting hard to swallow - up 90 cents over this time last year to almost $4 a gallon.
The worldwide wheat shortage has contributed to the inflation, but so has a host of other factors, said Darrel Good, agricultural economist with the University of Illinois. Biofuels production has pushed up corn and soybean prices. Meanwhile, the price of vegetable oils used in packaged foods and biodiesel has followed the price of crude oil sharply higher.
"It's a combination of all of the above factors, which are coming together at this point," Good said.
Unprecedented demand for agricultural products from fast-growing countries including China and India has exacerbated the supply crunch. In the market panics of previous years, prices would rise to a level that developing countries couldn't afford. But it's not clear where that peak level lies now, said Mark Schultz, chief analyst with Northstar Commodity.
"Globally, other economies are much stronger. China is up significantly, India is up significantly, and Russia's economy is much stronger," he said. "So when we used to run wheat prices up high, years ago, they didn't have the money and they didn't buy much of the product. Now prices run up and they're still buying."
March corn added 0.5 cent to $4.3875 a bushel, and January soybeans fell 0.25 cent to $11.5675 a bushel on the CBOT. Both corn and soybeans have recently touched record highs.
Elsewhere, other commodities prices fell as the dollar rose against major world currencies. A stronger dollar can make commodities appear more expensive to buyers abroad.
Oil prices fell after an official of the Organization for Petroleum Exporting Countries indicated the group could boost production, easing concerns about tight supplies.
"I would not exclude the possibility of increasing production if the market wants it," said Chakib Khelil, Algeria's oil minister, who becomes OPEC president on Jan. 1.
Light, sweet crude for January dropped 64 cents to close at $90.63 a barrel on the New York Mercantile Exchange.
Gasoline futures shed 0.63 cent to settle at $2.3354 a gallon, while heating oil futures lost 1 cent to settle at $2.5979 a gallon on the Nymex.
Precious metals ended in a mixed range, after fluctuating between losses and gains. February gold edged up $1.30 to settle at $799.30 an ounce, while March silver fell 0.3 cent to close at $13.98 an ounce.
A euro bought $1.439, down from $1.4425 late Friday, as the dollar strengthened.
Industrial metals mostly moved lower on the London Metal Exchange, with copper and zinc showing the steepest declines. Nickel prices edged higher.
Copper for March delivery fell 6.75 cents to $2.889 a pound on the Nymex.