This verse is part of Joseph's interpretation of the dreams of Pharaoh's cupbearer and baker while they were imprisoned. The chief baker, encouraged by Joseph's favorable interpretation of the cupbearer's dream, now shares his own dream.

Here's a breakdown of what the verse means:

"When the chief baker saw that the interpretation was good...": The baker observed that Joseph's explanation of the cupbearer's dream was positive and seemingly accurate, leading him to believe Joseph had a true gift of interpretation.
"...he said to Joseph, 'I also was in my dream, and behold, three baskets of white bread were on my head.'": The baker begins to describe his dream. The central image is:
"Three baskets of white bread": This is the key detail. The specific number (three) and the type of bread ("white bread," suggesting high quality) are important for the interpretation. Baskets, in general, can symbolize provision or responsibility. The fact that there are three suggests a set period of time or tasks.
"were on my head": This is also significant. Carrying something on the head signifies responsibility, burden, or shame. It contrasts sharply with the cupbearer's dream, where he freely served Pharaoh with wine.

Overall Meaning:

The verse sets the stage for Joseph's interpretation of the baker's dream. The dream imagery hints at responsibility, burden, and potentially something negative, as the baker is essentially carrying his own product on his head. It contrasts with the cupbearer who serves Pharaoh and the bread represents his burden or problem. The key elements (three baskets of white bread carried on his head) provide the raw material for Joseph to decode the dream's symbolic meaning, which, as we know from the rest of the story, is unfortunately a foretelling of the baker's execution.

The baker's willingness to share his dream after seeing Joseph's success with the cupbearer also highlights the power of hope and the desire for a positive outcome, even in a desperate situation.