Ergot is a spore-bearing fungus, parasitic on various grasses, but principally on rye. It now seldom occurs in cultivated cereal grains due to pre-planting treatment of the seed. It is, however, actively cultivated as a crop on rye (mostly in eastern Europe) for the industrial harvesting of its various toxic alkaloids.

The basis of the alkaloids is lysergic acid (LSD, anyone?) from which therapeutically important substances are derived, uses include both obstetrics and psychiatry.

My reference doesn't indicate how (or even whether) the alkaloids can be destroyed, but cases of ergot poisoning from bread products indicate that normal oven temperatures are not sufficient to do it.