Combine 1 cup flour, undissolved yeast and salt in a large bowl. Heat water, milk, butter and honey until very warm (120° to 130°F). Stir in cereal; let stand 2 minutes. Gradually add to flour mixture. Beat 2 minutes at medium speed of electric mixer, scraping bowl occasionally. Stir in enough remaining flour to make a soft dough. Knead on lightly floured surface until smooth and elastic, about 8 to 10 minutes. Cover; let rest 10 minutes.
Divide dough in half; roll each half to 7-inch rope. Place ropes side by side in greased 8-1/2 x 4-1/2-inch loaf pan. Cover; let rise in warm, draft-free place until doubled in size, about 1 hour.
Bake at 400°F for 25 to 30 minutes or until done. Remove from pan; cool on wire rack.