Melt butter in a large saucepan over medium heat, add onions and cook until onions are soft and golden. Add garlic and red pepper; sauté for an additional minute. Add pureed tomatoes, sugar, rice, and water. Bring to a boil. Lower the heat, cover and simmer covered for 25 to 30 minutes.
Add basil and simmer an additional 5 minutes.
Puree mixture in a blender or food processor and return to saucepan.
Warm milk (use milk to rinse out blender jar or microwave); slowly stir milk into soup base. Add salt and pepper.
Heat, ladle into bowls and add toasted bread cubes and top with Parmesan cheese.
May substitute 2 cans (14.5-15 oz.) diced tomatoes and reduce salt by ½ teaspoon.
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