Ceres Tactical Global 10Q 2018 Q2 Quarterly report

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

(X) QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)

OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2018

OR ( ) TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)

OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission File Number000-31563

CERES TACTICAL CURRENCY L.P.

(Exact name of registrant as specified in its charter)


Delaware		13-4084211

(State or other jurisdiction of
incorporation or organization)

(I.R.S. Employer

Identification No.)

c/o Ceres Managed Futures LLC

522 Fifth Avenue

New York, New York 10036

(Address of principal executive offices) (Zip Code)

(855) 672-4468

(Registrant’s telephone number, including area code)

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

YesX No _

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).

YesX No _

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, anon-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule12b-2 of the Exchange Act.


Large accelerated filer	Accelerated filer	Non-accelerated filerX
Smaller reporting company	Emerging growth company

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.

Indicate by check mark whether the registrant is a shell company (as defined in Rule12b-2 of the Exchange Act).

Yes _NoX

As of July 31, 2018, 648,289.908 Limited Partnership Class A Units were outstanding and 0.000 Limited Partnership Class Z Units were outstanding.

PART I. FINANCIAL INFORMATION

Item 1.Financial Statements.

Ceres Tactical Currency L.P.

Statements of Financial Condition


	June 30,		December 31,
	2018		2017
	(Unaudited)
Assets:
Investment in the Master Fund(s)⁽¹⁾, at fair value		$ 2,441,059	$	6,430,471
Redemptions receivable from the Master Fund(s)⁽¹⁾		110,076		501,270
Equity in trading account:
Unrestricted cash		3,310,360		-
Restricted cash		94,867		-
Net unrealized appreciation on open futures contracts		29,677		-

Total equity in trading accounts		3,434,904		-

Expense reimbursement receivable		14,357		-
Cash at bank		-		1,000
Interest receivable		6,515		1,627


Total assets	$	6,006,911	$	6,934,368

Liabilities and Partners’ Capital:
Liabilities:
Accrued expenses:
Ongoing placement agent fees	$	9,639	$	11,824
General Partner fees		3,658		9,460
Management fees		4,858		8,868
Incentive fees		30,370		-
Professional fees		54,850		-
Redemptions payable to General Partner		-		25,000
Redemptions payable to Limited Partners		101,211		446,118


Total liabilities		204,586		501,270

Partners’ Capital:
General Partner, Class A, 0.000 and 8,199.927 Units outstanding at June 30, 2018 and December 31, 2017, respectively		-		70,104
General Partner, Class Z, 7,027.337 and 0.000 Units outstanding at June 30, 2018 and December 31, 2017, respectively		71,786		-
Limited Partners, Class A, 658,148.758 and 744,227.936 Units outstanding at June 30, 2018 and December 31, 2017, respectively		5,730,539		6,362,994

Total partners’ capital (net asset value)		5,802,325		6,433,098

Total liabilities and partners’ capital	$	6,006,911	$	6,934,368

Net asset value per Unit, Class A	$	8.71	$	8.55

Net asset value per Unit, Class Z	$	10.22	$	-

⁽¹⁾	Defined in Note 1.

See accompanying notes to financial statements.

Ceres Tactical Currency L.P.

Condensed Schedule of Investments

June 30, 2018

(Unaudited)


	Notional ($)/ Number of Contracts		Fair Value		% of Partners’ Capital
Futures Contracts Purchased
Currencies		2	$	301		0.00	%*

Total futures contracts purchased				301		0.00	*


Futures Contracts Sold
Currencies		45		29,470		0.51
Interest Rates U.S.		1		(94)		(0.00)	*

Total futures contracts sold				29,376		0.51

Net unrealized appreciation on open futures contracts			$	29,677		0.51	%


Investment in the Master Funds
Cambridge Master Fund L.P.			$	327,236		5.64	%
CMF AE Capital Master Fund LLC				2,113,823		36.43

Total investment in the Master Funds			$	2,441,059		42.07	%

* Due to rounding

See accompanying notes to financial statements.

Ceres Tactical Currency L.P.

Statements of Income and Expenses

(Unaudited)


	Three Months Ended June 30,				Six Months Ended June 30,
	2018		2017		2018		2017
Investment Income:
Interest income	$	11,252	$	-	$	20,346	$	-
Interest income allocated from the Master Fund(s)		8,912		12,358		16,767		21,440

Total investment income		20,164		12,358		37,113		21,440


Expenses:
Expenses allocated from the Master Funds		5,043		-		7,319		-
Clearing fees related to direct investments		7,503		-		12,580		-
Ongoing placement agent fees		29,695		44,791		61,452		90,005
General Partner fees		11,268		35,832		23,177		72,003
Management fees		14,968		33,593		29,782		67,503
Incentive fees		30,370		-		30,370		-
Professional fees		43,853		-		90,422		-

Total expenses		142,700		114,216		255,102		229,511
Expenses borne by the General Partner		(43,629)		-		(84,055)		-

Net expenses		99,071		114,216		171,047		229,511

Net investment loss		(78,907)		(101,858)		(133,934)		(208,071)


Trading Results:
Net gains (losses) on trading of commodity interests and investment in the Master Funds: Net realized gains (losses) on closed contracts		269,746		-		188,267		-
Net realized gains (losses) on closed contracts allocated from the Master Fund(s)		(84,091)		394,620		(70,934)		705,027
Net change in unrealized gains (losses) on open contracts		(15,311)		-		29,939		-
Net change in unrealized gains (losses) on open contracts allocated from the Master Fund(s)		6,719		(213,622)		98,826		318,090


Total trading results		177,063		180,998		246,098		1,023,117


Net income (loss)	$	98,156	$	79,140	$	112,164	$	815,046


Net income (loss) per Unit*:
Class A	$	0.14	$	0.08	$	0.16	$	0.82

Class Z	$	0.22	$	-	$	0.22	$	-


Weighted average number of Units outstanding:
Class A		690,429.988		931,844.378		714,323.423		966,815.384

Class Z		7,027.337		-		7,027.337		-

Represents the change in net asset value per Unit during the period.

See accompanying notes to financial statements.

Ceres Tactical Currency L.P.

Statements of Changes in Partners’ Capital

For the Six Months Ended June 30, 2018 and 2017

(Unaudited)


	Class A				Class Z				Total
	Amount		Units		Amount		Units		Amount		Units
Partners’ Capital, December 31, 2017	$	6,433,098		752,427.863	$	-		-	$	6,433,098		752,427.863
Subscriptions - General Partner		-		-		70,274		7,027.337		70,274		7,027.337
Redemptions - General Partner		(70,239)		(8,199.927)		-		-		(70,239)		(8,199.927)
Redemptions - Limited Partners		(742,972)		(86,079.178)		-		-		(742,972)		(86,079.178)
Net income (loss)		110,652		-		1,512		-		112,164		-

Partners’ Capital, June 30, 2018	$	5,730,539		658,148.758	$	71,786		7,027.337	$	5,802,325		665,176.095


Partners’ Capital, December 31, 2016	$	9,094,995		1,028,828.887	$	-		-	$	9,094,995		1,028,828.887
Redemptions - General Partner		(15,000)		(1,552.795)		-		-		(15,000)		(1,552.795)
Redemptions - Limited Partners		(1,275,890)		(135,430.781)		-		-		(1,275,890)		(135,430.781)
Net income (loss)		815,046		-		-		-		815,046		-

Partners’ Capital, June 30, 2017	$	8,619,151		891,845.311	$	-		-	$	8,619,151		891,845.311

See accompanying notes to financial statements.

Ceres Tactical Currency L.P.

Notes to Financial Statements

(Unaudited)

1.	Organization:

Ceres Tactical Currency L.P. (the “Partnership”) is a Delaware limited partnership organized in 1999 to engage primarily in the speculative trading of futures contracts, options on futures and forward contracts, and forward contracts on physical commodities and other commodity interests, including, but not limited to, foreign currencies, financial instruments, metals, energy, and agricultural products (collectively, “Futures Interests”) (refer to Note 4, “Financial Instruments”). The Futures Interests that are traded by the Partnership, either directly, through individually managed accounts, or indirectly, through its investment in the Master Funds (as defined below), are volatile and involve a high degree of market risk. The General Partner (as defined below) may also determine to invest up to all of the Partnership’s assets in United States (“U.S.”) Treasury bills and/or money market mutual funds, including money market mutual funds managed by Morgan Stanley or its affiliates. Prior to the close of business on December 31, 2017, the Partnership was one of the Morgan Stanley Spectrum series of funds, comprised of the Partnership, Morgan Stanley Smith Barney Spectrum Select L.P., Morgan Stanley Smith Barney Spectrum Strategic L.P. and, prior to its termination on December 31, 2017, Morgan Stanley Smith Barney Spectrum Technical L.P.

Ceres Managed Futures LLC, a Delaware limited liability company, acts as the general partner (“Ceres” or the “General Partner”) and commodity pool operator of the Partnership, and as the commodity pool operator and general partner or trading manager (in such capacity, the “Trading Manager”) of each Master Fund (as defined below). Ceres is a wholly-owned subsidiary of Morgan Stanley Domestic Holdings, Inc. (“MSD Holdings”). MSD Holdings is ultimately owned by Morgan Stanley. Morgan Stanley is a publicly held company whose shares are listed on the New York Stock Exchange. Morgan Stanley is engaged in various financial services and other businesses.

During the reporting periods ended June 30, 2018 and 2017, the Partnership’s and the Master Funds’ commodity broker was Morgan Stanley & Co. LLC (“MS&Co.”), a registered futures commission merchant. JPMorgan Chase Bank, N.A. (“JPMorgan”) may also act as a foreign exchange forward or swap counterparty for the Partnership/Master Funds. During prior periods included in this report, the Partnership and the Master Funds also deposited a portion of their cash in anon-trading account at JPMorgan.

As of June 30, 2018, all trading decisions were made for the Partnership by AE Capital PTY Limited (“AE Capital”), P/E Global LLC (“P/E Global”), Greenwave Capital Management LLC (“Greenwave”) and The Cambridge Strategy (Asset Management) Limited (“Cambridge”) (each individually, a “Trading Advisor” or collectively, the “Trading Advisors”), each of which is a registered commodity trading advisor. Each Trading Advisor is allocated a portion of the Partnership’s assets to manage. AE Capital and Cambridge manage the assets of the Partnership through the Partnership’s investment in CMF AE Capital Master Fund LLC, a Delaware limited liability company (“AE Capital Master Fund”) and Cambridge Master Fund L.P., a Delaware limited partnership (“Cambridge Master Fund” and collectively with AE Capital Master Fund the “Master Funds”), respectively, each of which is an affiliated fund. P/E Global and Greenwave each manage the assets of the Partnership directly through managed accounts in the Partnership’s name. The Trading Advisors are not affiliated with one another, the General Partner or MS&Co., and are not responsible for the organization or operation of the Partnership.

AE Capital Master Fund and Cambridge Master Fund have each entered into a futures brokerage account agreement with MS&Co. AE Capital Master Fund and Cambridge Master Fund have also each entered into a foreign exchange prime brokerage agreement with MS&Co. The Partnership has also entered into a futures brokerage account agreement and a foreign exchange prime brokerage agreement with MS&Co. Pursuant to these agreements, the Partnership, directly or through its investment in the Master Funds, pays MS&Co. (or will reimburse MS&Co. if previously paid) its allocable share of all trading fees for the clearing and, where applicable, execution of transactions as well as exchange, clearing, user,give-up, floor brokerage and National Futures Association fees (collectively, the “Clearing fees”).

As of January 1, 2018, units of limited partnership interest (“Unit(s)”) of the Partnership are being offered in two classes (each, a “Class” or collectively, the “Classes”): Class A Units and Class Z Units. Class A Units and Class Z Units are identical, except that Class Z Units are not subject to the monthly ongoing placement agent fee.

All Units issued prior to January 1, 2018 were deemed “Class A Units.” The rights, liabilities, risks, and fees associated with investment in the Class A Units were not changed. Class Z Units are offered to limited partners who receive advisory services from Morgan Stanley Wealth Management and may also be offered to certain employees of Morgan Stanley and/or its subsidiaries (and their family members). Class Z Units were first issued on April 1, 2018.

Ceres Tactical Currency L.P.

Notes to Financial Statements

(Unaudited)

In July 2015, the General Partner delegated certain administrative functions to SS&C Technologies, Inc., a Delaware corporation, currently doing business as SS&C GlobeOp (the “Administrator”). Pursuant to a master services agreement, the Administrator furnishes certain administrative, accounting, regulatory reporting, tax and other services as agreed from time to time. In addition, the Administrator maintains certain books and records of the Partnership. Effective January 1, 2018, the General Partner pays or reimburses the Partnership, from the General Partner fee it receives from the Partnership, the ordinary administrative expenses of the Partnership, to the extent these expenses exceed 0.85% annually of the net assets of the Partnership. This includes the expenses related to the engagement of the Administrator. Prior to January 1, 2018, the General Partner fully reimbursed the Partnership for these expenses.

2.	Basis of Presentation and Summary of Significant Accounting Policies:

The accompanying financial statements and accompanying notes are unaudited but, in the opinion of the General Partner, include all adjustments, consisting only of normal recurring adjustments, necessary for a fair presentation of the Partnership’s financial condition at June 30, 2018, the results of its operations for the three and six months ended June 30, 2018 and 2017 and changes in partners’ capital for the six months ended June 30, 2018 and 2017. These financial statements present the results of interim periods and do not include all disclosures normally provided in annual financial statements. These financial statements should be read together with the financial statements and notes included in the Partnership’s Annual Report on Form10-K (the “Form10-K”) filed with the Securities and Exchange Commission (the “SEC”) for the year ended December 31, 2017. The December 31, 2017 information has been derived from the audited financial statements as of and for the year ended December 31, 2017.

Due to the nature of commodity trading, the results of operations for the interim periods presented should not be considered indicative of the results that may be expected for the entire year.

Use of Estimates. The preparation of financial statements and accompanying notes in conformity with accounting principles generally accepted in the United States of America (“GAAP”) requires the General Partner to make estimates and assumptions that affect the reported amounts of assets and liabilities, income and expenses, and related disclosures of contingent assets and liabilities in the financial statements and accompanying notes. As a result, actual results could differ from these estimates, and those differences could be material.

Profit Allocation. The General Partner and each limited partner of the Partnership share in the profits and losses of the Partnership in proportion to the amount of Partnership interest owned by each, except that no limited partner is liable for obligations of the Partnership in excess of its capital contributions and profits, if any, net of distributions, redemptions and losses, if any.

Statement of Cash Flows.The Partnership has not provided a Statement of Cash Flows, as permitted by Accounting Standards Codification (“ASC”) 230, “Statement of Cash Flows.” The Statements of Changes in Partners’ Capital is included herein, and as of and for the periods ended June 30, 2018 and 2017, the Partnership carried no debt and all the Partnership’s investments were carried at fair value and classified as Level 1 and Level 2 measurements.

Partnership’s Investment in the Master Funds.The Partnership carries its investment in the Master Funds based on the Partnership’s (1) respective net contribution to each Master Fund and (2) its respective allocated share of the undistributed profits and losses, including realized gains or losses and net change in unrealized gains or losses, of each Master Fund. The valuation of the Master Funds’ investments, including the classification within the fair value hierarchy of the investments held by the Master Funds, are described in Note 6, “Fair Value Measurements.”

Partnership’s/Master Funds’ Derivative Investments. All Futures Interests held by the Partnership/Master Funds, including derivative financial instruments and derivative commodity instruments, are held for trading purposes. The Futures Interests are recorded on trade date and open contracts are recorded at fair value (as described in Note 6, “Fair Value Measurements”) at the measurement date. Investments in Futures Interests denominated in foreign currencies are translated into U.S. dollars at the exchange rates prevailing at the measurement date. Gains or losses are realized when contracts are liquidated. Unrealized gains or losses on open contracts are included as a component of “equity in trading account” in the Partnership’s/Master Funds’ Statements of Financial Condition. Net realized gains or losses and net change in unrealized gains or losses are included in the Partnership’s/Master Funds’ Statements of Income and Expenses.

Ceres Tactical Currency L.P.

Notes to Financial Statements

(Unaudited)

The Partnership and the Master Funds do not isolate the portion of the results of operations arising from the effect of changes in foreign exchange rates on investments from fluctuations due to changes in market prices of investments held. Such fluctuations are included in total trading results in the Partnership’s/Master Funds’ Statements of Income and Expenses.

Restricted and Unrestricted Cash. The cash held by the Partnership that is available for Futures Interests trading is on deposit in commodity brokerage accounts with MS&Co. As reflected in the Statements of Financial Condition, restricted cash equals the cash portion of assets on deposit to meet margin requirements, as determined by the exchange or counterparty, and required by MS&Co. All of these amounts are maintained separately. At June 30, 2018 and December 31, 2017, the amount of cash held for margin requirements was $94,867 and $0, respectively. Cash that is not classified as restricted cash is therefore classified as unrestricted cash. Restricted and unrestricted cash includes cash denominated in foreign currencies of $(7,674) (proceeds of $7,936) and $(0) (cost of $0) as of June 30, 2018 and December 31, 2017, respectively.

Income Taxes. Income taxes have not been recorded as each partner is individually liable for the taxes, if any, on its share of the Partnership’s income and expenses. The Partnership follows the guidance of ASC 740, “Income Taxes,” which prescribes a recognition threshold and measurement attribute for financial statement recognition and measurement of tax positions taken or expected to be taken in the course of preparing the Partnership’s tax returns to determine whether the tax positions are“more-likely-than-not” of being sustained “when challenged” or “when examined” by the applicable tax authority. Tax positions determined not to meet themore-likely-than-not threshold would be recorded as a tax benefit or liability in the Partnership’s Statements of Financial Condition for the current year. If a tax position does not meet the minimum statutory threshold to avoid the incurring of penalties, an expense for the amount of the statutory penalty and interest, if applicable, shall be recognized in the Statements of Income and Expenses in the period in which the position is claimed or expected to be claimed. The General Partner has concluded that there are no significant uncertain tax positions that would require recognition in the financial statements. The Partnership files U.S. federal and various state and local tax returns. No income tax returns are currently under examination. The 2014 through 2017 tax years remain subject to examination by U.S. federal and most state tax authorities.

Investment Company Status. Effective January 1, 2014, the Partnership adopted Accounting Standards Update2013-08, “Financial Services — Investment Companies (Topic 946): Amendments to the Scope, Measurement and Disclosure Requirements” and based on the General Partner’s assessment, the Partnership has been deemed to be an investment company since inception. Accordingly, the Partnership follows the investment company accounting and reporting guidance of Topic 946 and reflects its investments at fair value with unrealized gains and losses resulting from changes in fair value reflected in the Statements of Income and Expenses.

Net Income (Loss) per Unit.Net income (loss) per Unit is calculated in accordance with ASC 946, “Financial Services — Investment Companies.” See Note 3, “Financial Highlights.”

There have been no material changes with respect to the Partnership’s critical accounting policies as reported in the Partnership’s Annual Report on Form10-K for the year ended December 31, 2017.

Ceres Tactical Currency L.P.

Notes to Financial Statements

(Unaudited)

3.	Financial Highlights:

Financial highlights for the limited partner class as a whole for the three and six months ended June 30, 2018 and 2017 were as follows:


	For the Three Months Ended June 30,						For the Six Months Ended June 30,
	2018			2017			2018			2017
	Class A			Class A			Class A			Class A
Per Unit Performance (for a unit outstanding throughout the period): *

Net realized and unrealized gains (losses)	$	0.25		$	0.19		$	0.35		$	1.04
Net investment loss		(0.11)			(0.11)			(0.19)			(0.22)

Net increase (decrease) for the period		0.14			0.08			0.16			0.82
Net asset value per Unit, beginning of period		8.57			9.58			8.55			8.84

Net asset value per Unit, end of period	$	8.71		$	9.66		$	8.71		$	9.66


	For the Three Months Ended June 30,						For the Six Months Ended June 30,
	2018			2017			2018			2017
	Class A			Class A			Class A			Class A
Ratios to Average Limited Partners’ Capital: **
Net investment loss ***		(3.8)	%		(4.6)	%		(3.9)	%		(4.7)	%


Operating expenses before expenses borne by the General Partner and incentive fees		7.6	%		5.2	%		7.4	%		5.2	%
Expenses borne by the General Partner		(2.9)	%		-	%		(2.8)	%		-	%
Incentive fees		0.5	%		-	%		0.5	%		-	%

Operating expenses after expenses borne by the General Partner and incentive fees		5.2	%		5.2	%		5.1	%		5.2	%


Total return:
Total return before incentive fees		2.1	%		0.8	%		2.4	%		9.3	%
Incentive fees		(0.5)	%		-	%		(0.5)	%		-	%

Total return after incentive fees		1.6	%		0.8	%		1.9	%		9.3	%

Net investment loss per Unit is calculated by dividing the interest income less total expenses by the average number of Units outstanding during the period. The net realized and unrealized gains (losses) per Unit is a balancing amount necessary to reconcile the change in net asset value per Unit with the other per unit information.

**	Annualized (except for incentive fees if applicable).

***	Interest income less total expenses.

The above ratios and total return may vary for individual investors based on the timing of capital transactions during the period. Additionally, these ratios are calculated for the limited partner Classes using the limited partners’ share of income, expenses and average limited partners’ capital of the Partnership, and include the income and expenses allocated from the Master Fund(s).

Ceres Tactical Currency L.P.

Notes to Financial Statements

(Unaudited)

4.	Financial Instruments:

The Partnership and the Master Funds trade Futures Interests. Futures and forwards represent contracts for delayed delivery of an instrument at a specified date and price. Futures Interests are open commitments until the settlement date, at which time they are realized. They are valued at fair value, generally on a daily basis, and the unrealized gains and losses on open contracts (the difference between contract trade price and market price) are reported in the Statements of Financial Condition as a net unrealized appreciation or depreciation on open futures contracts or net unrealized appreciation or depreciation on open forwards contracts. The resulting net change in unrealized gains and losses is reflected in “Net change in unrealized gains (losses) on open contracts” and “Net change in unrealized gains (losses) on open contracts allocated from the Master Funds” from one period to the next in the Statements of Income and Expenses. The Partnership’s/Master Funds’ contracts are accounted for on a trade-date basis. Gains or losses are realized when contracts are liquidated and are determined using thefirst-in,first-out method. Risk arises from changes in the value of these contracts and the potential inability of counterparties to perform under the terms of the contracts. There are numerous factors which may significantly influence the fair value of these contracts, including interest rate volatility.

The fair value of an exchange-traded contract is based on the settlement price quoted by the exchange on the day with respect to which fair value is being determined. If an exchange-traded contract could not have been liquidated on such day due to the operation of daily limits or other rules of the exchange, the settlement price will be equal to the settlement price on the first subsequent day on which the contract could be liquidated.

In general, the risks associated withnon-exchange traded contracts are greater than those associated with exchange-traded contracts because of the greater risk of default by the counterparty to anon-exchange traded contract. The Partnership and the Master Funds have credit risk associated with counterparty nonperformance. As of the date of the financial statements, the credit risk associated with the instruments in which the Partnership and the Master Funds trade is limited to the unrealized gain (loss) amounts reflected in the Partnership’s/Master Funds’ Statements of Financial Condition. The net unrealized gains (losses) on open contracts are further disclosed gross by type of contract and corresponding fair value level in Note 6, “Fair Value Measurements.”

The Partnership also has credit risk because MS&Co. acts as the commodity futures broker, or the counterparty, with respect to most of the Partnership’s assets. Exchange-traded futures and exchange-traded forward contracts are fair valued on a daily basis, with variations in value settled on a daily basis. With respect to the Partnership’snon-exchange traded forward currency contracts and forward currency option contracts, there are no daily settlements of variation in value, nor is there any requirement that an amount equal to the net unrealized gains (losses) on such contracts be segregated. However, the Partnership is required to meet margin requirements equal to the net unrealized loss on open forward currency contracts in the Partnership’s accounts with the counterparty, which is accomplished by daily maintenance of the cash balance in a custody account held at MS&Co., for the benefit of MS&Co. With respect to thosenon-exchange traded forward currency contracts, the Partnership is at risk to the ability of MS&Co., the sole counterparty on all such contracts, to perform. The Partnership has a netting agreement with the counterparty. The primary terms are based on industry standard master netting agreements. This agreement, which seeks to reduce both the Partnership’s and the counterparty’s exposure onnon-exchange traded forward currency contracts, should materially decrease the Partnership’s credit risk in the event of MS&Co.’s bankruptcy or insolvency.

The General Partner monitors and attempts to mitigate the Partnership’s/Master Funds’ risk exposure on a daily basis through financial, credit and risk management monitoring systems, and, accordingly, believes that it has effective procedures for evaluating and limiting the credit and market risks to which the Partnership/Master Funds may be subject. These monitoring systems generally allow the General Partner to statistically analyze actual trading results with risk adjusted performance indicators and correlation statistics. In addition, online monitoring systems provide account analysis of futures and forward contracts by sector, margin requirements, gain and loss transactions and collateral positions.

The U.S. Treasury bills and Futures Interests traded by the Partnership and the Master Funds involve varying degrees of related market risk. Market risk is often dependent upon changes in the level or volatility of interest rates, exchange rates, and prices of financial instruments and commodities, factors that result in frequent changes in the fair value of the Partnership’s open positions, and consequently in its earnings, whether realized or unrealized, and cash flow. Gains and losses on open positions of exchange-traded futures, exchange-traded forward, and exchange-traded futures-styled option contracts are settled daily through variation margin. Gains and losses onnon-exchange traded forward currency contracts are settled upon termination of the contract. Gains and losses onnon-exchange traded forward currency option contracts are settled on an agreed-upon settlement date.

Ceres Tactical Currency L.P.

Notes to Financial Statements

(Unaudited)

In the ordinary course of business, the Partnership and the Master Funds enter into contracts and agreements that contain various representations and warranties and which provide general indemnifications. The Partnership’s/Master Funds’ maximum exposure under these arrangements cannot be determined, as this could include future claims that have not yet been made against the Partnership/Master Funds. The Partnership and the Master Funds consider the risk of any future obligation relating to these indemnifications to be remote.

5.	Trading Activities:

The Partnership’s objective is to profit from speculative trading in Futures Interests. Therefore, the Trading Advisors for the Partnership will take speculative positions in Futures Interests where it feels the best profit opportunities exist for its trading strategies. As such, the average number of contracts outstanding in absolute quantities (the total of the open long and open short positions) has been presented as a part of the volume disclosure, as position direction is not an indicative factor in such volume disclosures. With regard to foreign currency forward trades, each notional quantity amount has been converted to an equivalent contract based upon an industry convention.

All of the Futures Interests owned directly by the Partnership are held for trading purposes. All of the Futures Interests owned by the Master Funds are held for trading purposes. The monthly average number of futures contracts traded directly by the Partnership during the three months ended June 30, 2018 was 43. The monthly average number of futures contracts traded directly by the Partnership during the six months ended June 30, 2018 was 49. There were no direct investments at June 30, 2017.

The following table summarizes the gross and net amounts recognized relating to assets and liabilities of the Partnership’s derivative instruments and transactions eligible for offset subject to master netting agreements or similar agreements as of June 30, 2018.


			Gross Amounts Offset in the Statements of Financial Condition		Amounts Presented in the Statements of Financial Condition		Gross Amounts Not Offset in the Statements of Financial Condition
June 30, 2018	Gross Amounts Recognized				Amounts Presented in the Statements of Financial Condition		Financial Instruments		Cash Collateral Received/ Pledged*		Net Amount

Assets
M S&Co.
Futures	$	40,785	$	(11,108)	$	29,677	$	-	$	-	$	29,677

Total assets	$	40,785	$	(11,108)	$	29,677	$	-	$	-	$	29,677


Liabilities
M S&Co.
Futures	$	(11,108)	$	11,108	$	-	$	-	$	-	$	-

Total liabilities	$	(11,108)	$	11,108	$	-	$	-	$	-	$	-

Net fair value											$	29,677	*

In the event of default by the Partnership, MS&Co., the Partnership’s commodity futures broker and the sole counterparty to the Partnership’snon-exchange-traded contracts, as applicable, has the right to offset the Partnership’s obligation with the Partnership’s cash and/or U.S. Treasury bills held by MS&Co., thereby minimizing MS&Co.’s risk of loss. In certain instances, MS&Co. may not post collateral and as such, in the event of default by MS&Co., the Partnership is exposed to the amount shown in the Statements of Financial Condition. In the case of exchange-traded contracts, the Partnership’s exposure to counterparty risk may be reduced since the exchange’s clearinghouse interposes its credit between buyer and seller and the clearinghouse’s guarantee funds may be available in the event of a default.

Ceres Tactical Currency L.P.

Notes to Financial Statements

(Unaudited)

The following table indicates the gross fair values of derivative instruments of futures contracts held directly by the Partnership as separate assets and liabilities as of June 30, 2018. There were no direct investments held by the Partnership at December 31, 2017.


	June 30, 2018
Assets
Futures Contracts
Currencies	$	40,785

Total unrealized appreciation on open futures contracts		40,785


Liabilities
Futures Contracts
Currencies		(11,014)
Interest Rates U.S.		(94)

Total unrealized depreciation on open futures contracts		(11,108)

Net unrealized appreciation on open futures contracts	$	29,677	*

*	This amount is in “Net unrealized appreciation on open futures contracts” in the Statements of Financial Condition.

The following table indicates the trading gains and losses, by market sector, on derivative instruments traded directly by the Partnership for the three and six months ended June 30, 2018. During the three and six months ended June 30, 2017, no derivative instruments were traded directly by the Partnership.


	Three Months Ended June 30,			Six Months Ended June 30,
Sector	2018			2018
Currencies	$	248,280		$	224,762
Energy		2,006			1,995
Indices		3,672			(3,718)
Interest Rates U.S.		6,017			11,011
Interest RatesNon-U.S.		(341)			(8,261)
Metals		(5,199)			(7,583)

Total	$	254,435	*	$	218,206	*

*	This amount is in “Total trading results” in the Statements of Income and Expenses.

Ceres Tactical Currency L.P.

Notes to Financial Statements

(Unaudited)

6.	Fair Value Measurements:

Fair value is defined as the value that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date under current market conditions. The fair value hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1) and the lowest priority to fair values derived from unobservable inputs (Level 3). The level in the fair value hierarchy within which the fair value measurement in its entirety falls shall be determined based on the lowest level input that is significant to the fair value measurement in its entirety.

The fair value of exchange-traded futures, options and forward contracts is determined by the various futures exchanges, and reflects the settlement price for each contract as of the close of business on the last business day of the reporting period. The fair value of foreign currency forward contracts is extrapolated on a forward basis from the spot prices quoted as of approximately 3:00 P.M. (E.T.) on the last business day of the reporting period from various exchanges. The fair value ofnon-exchange-traded foreign currency option contracts is calculated by applying an industry standard model application for options valuation of foreign currency options, using as input the spot prices, interest rates, and option implied volatilities quoted as of approximately 3:00 P.M. (E.T.) on the last business day of the reporting period. U.S. Treasury bills are valued at the last available bid price received from independent pricing services as of the close of the last business day of the reporting period.

The Partnership and the Master Funds consider prices for commodity futures, swap and option contracts to be based on unadjusted quoted prices in active markets for identical assets and liabilities (Level 1). The values of U.S. Treasury bills,non-exchange-traded forward, swap and certain option contracts for which market quotations are not readily available are priced by pricing services that derive fair values for those assets and liabilities from observable inputs (Level 2). As of June 30, 2018 and for the periods ended June 30, 2018 and 2017, the Partnership and the Master Funds did not hold any derivative instruments that were priced at fair value using unobservable inputs through the application of the General Partner’s assumptions and internal valuation pricing models (Level 3). Transfers between levels are recognized at the beginning of the reporting period. During the reporting periods, there were no transfers of assets or liabilities between Level 1 and Level 2.


June 30, 2018	Total		Level 1		Level 2		Level 3

Assets
Futures	$	40,785	$	40,785	$	-	$	-

Total assets	$	40,785	$	40,785	$	-	$	-


Liabilities
Futures	$	11,108	$	11,108	$	-	$	-

Total liabilities	$	11,108	$	11,108	$	-	$	-

Ceres Tactical Currency L.P.

Notes to Financial Statements

(Unaudited)

7.	Investment in the Master Funds:

On November 1, 2012, the Partnership allocated a portion of its assets to Cambridge for trading through investment in Cambridge Master Fund, a limited partnership organized under the partnership laws of the State of Delaware. Cambridge Master Fund permits accounts managed now and in the future by Cambridge using Cambridge Asian Markets Alpha Programme and, from October 1, 2013, Cambridge Emerging Markets Alpha Programme, each a proprietary, systematic trading program, to invest together in one trading vehicle. Individual and pooled accounts currently managed by Cambridge, including the Partnership, are permitted to be limited partners of Cambridge Master Fund. The General Partner and Cambridge believe that trading through this master/feeder structure promotes efficiency and economy in the trading process. The General Partner and Cambridge agreed that Cambridge will trade the Partnership’s assets allocated to Cambridge at a level that is up to 1.5 times the amount of assets allocated. The amount of leverage may be increased or decrease in the future. However, in no event will the amount of leverage be greater than 2 times the amount of assets allocated.

On or about February 1, 2018, the Partnership allocated a portion of its assets to AE Capital for trading through investment in AE Capital Master Fund, a Delaware limited liability company. AE Capital Master Fund permits accounts managed by AE Capital using its AE Systematic FX Fund Program, a proprietary, discretionary trading system, to invest together in one trading vehicle. Individual and pooled accounts currently managed by AE Capital, including the Partnership, are permitted to be limited partners of AE Capital Master Fund. The General Partner and AE Capital believe that trading through this master/feeder structure promotes efficiency and economy in the trading process.

The General Partner is not aware of any material changes to any of the trading programs discussed above during the fiscal quarter ended June 30, 2018.

The Master Funds’ and the Partnership’s trading of Futures Interests is done primarily on U.S. and foreign commodity exchanges. The Master Funds and the Partnership engage in such trading through commodity brokerage accounts maintained with MS&Co.

Generally, a limited partner/member in a Master Fund withdraws all or part of its capital contribution and undistributed profits, if any, from the Master Fund as of the end of any month (the “Redemption Date”) after a request has been made to the General Partner/Trading Manager at least three days in advance of the Redemption Date. Such withdrawals are classified as a liability when the limited partner/member elects to redeem and informs the Master Fund. However, for each Master Fund a limited partner/member may request a withdrawal as of the end of any day if such request is received by the General Partner/Trading Manager at least three days in advance of the proposed withdrawal day.

Management fees, ongoing placement agent fees, General Partner fees and incentive fees are charged at the Partnership level. Clearing fees are borne by the Master Funds and allocated to the Master Funds’ limited partners/members, including the Partnership. Effective January 1, 2018, Clearing fees are also borne by the Partnership directly. Professional fees are borne by the Master Funds and allocated to the Partnership, and effective January 1, 2018, also charged directly at the Partnership level. Effective January 1, 2018, the General Partner reimburses the Partnership for Clearing fees and professional fees to the extent that these fees exceed 0.85% annually of the net assets of the Partnership.

As of June 30, 2018, the Partnership owned approximately 1.0% and 8.7% of Cambridge Master Fund and AE Capital Master Fund, respectively. Prior to the close of business on December 31, 2017, the Partnership owned approximately 22.9% of Cambridge Master Fund. It is the Partnership’s intention to continue to invest in the Master Funds. The performance of the Partnership is directly affected by the performance of the Master Funds. Expenses to investors as a result of the investment in the Master Funds are approximately the same as they would be if the Partnership traded directly and the redemption rights are not affected.

Ceres Tactical Currency L.P.

Notes to Financial Statements

(Unaudited)

Summarized information reflecting the total assets, liabilities and partners’/members’ capital of the Master Funds is shown in the following tables:


	June 30, 2018
	Total Assets		Total Liabilities		Total Capital
Cambridge Master Fund	$	33,813,915	$	1,536,570	$	32,277,345
AE Capital Master Fund		24,711,030		213,820		24,497,210

	December 31, 2017
	Total Assets		Total Liabilities		Total Capital
Cambridge Master Fund	$	31,063,463	$	4,384,639	$	26,678,824

Summarized information reflecting the Partnership’s investment in and the Partnership’spro-rata share of the results of operations of the Master Funds is shown in the following tables:


	June 30, 2018				For the three months ended June 30, 2018
	% of							Expenses				Net
	Partners’		Fair		Income			Clearing		Professional		Income			Investment	Redemptions
Master Funds	Capital		Value		(Loss)			Fees		Fees		(Loss)			Objective	Permitted
Cambridge Master Fund		5.6%	$	327,236	$	(16,122	)	$	250	$	175	$	(16,547	)	Commodity Portfolio	Monthly
AE Capital Master Fund		36.4%		2,113,823		(52,338)			3,019		1,599		(56,956)		Commodity Portfolio	Monthly

Total			$	2,441,059	$	(68,460)		$	3,269	$	1,774	$	(73,503)


	June 30, 2018				For the six months ended June 30, 2018
	% of							Expenses				Net
	Partners’		Fair		Income			Clearing		Professional		Income			Investment	Redemptions
Master Funds	Capital		Value		(Loss)			Fees		Fees		(Loss)			Objective	Permitted
Cambridge Master Fund		5.6%	$	327,236	$	107,667		$	559	$	662	$	106,446		Commodity Portfolio	Monthly
AE Capital Master Fund⁽¹⁾		36.4%		2,113,823		(63,008)			3,343		2,755		(69,106)		Commodity Portfolio	Monthly

Total			$	2,441,059	$	44,659		$	3,902	$	3,417	$	37,340


	December 31, 2017				For the three months ended June 30, 2017
	% of							Expenses				Net
	Partners’		Fair		Income			Clearing		Professional		Income			Investment	Redemptions
Master Funds	Capital		Value		(Loss)			Fees		Fees		(Loss)			Objective	Permitted
Cambridge Master Fund		100.0%	$	6,430,471	$	193,356		$	-	$	-	$	193,356		Commodity Portfolio	Monthly

Total			$	6,430,471	$	193,356		$	-	$	-	$	193,356


	December 31, 2017				For the six months ended June 30, 2017
	% of							Expenses				Net
	Partners’		Fair		Income			Clearing		Professional		Income			Investment	Redemptions
Master Funds	Capital		Value		(Loss)			Fees		Fees		(Loss)			Objective	Permitted
Cambridge Master Fund		100.0%	$	6,430,471	$	1,044,557		$	-	$	-	$	1,044,557		Commodity Portfolio	Monthly

Total			$	6,430,471	$	1,044,557		$	-	$	-	$	1,044,557

(1)	From February 1, 2018, the date the Partnership invested into AE Capital Master Fund, through June 30, 2018.

Ceres Tactical Currency L.P.

Notes to Financial Statements

(Unaudited)

The tables below represent summarized Income Statement Information for the Master Funds for the three and six months ended June 30, 2018 and 2017, respectively.


	For the three months ended June 30, 2018
	Net Investment Income		Total Trading Results		Net Income (Loss)
Cambridge Master Fund	$	99,367	$	(517,681)	$	(418,314)
AE Capital Master Fund		50,825		(658,284)		(607,459)

	For the six months ended June 30, 2018
	Net Investment Income		Total Trading Results		Net Income (Loss)
Cambridge Master Fund	$	184,655	$	1,492,646	$	1,677,301
AE Capital Master Fund⁽¹⁾		89,539		(813,757)		(724,218)

	For the three months ended June 30, 2017
	Net Investment Income		Total Trading Results		Net Income (Loss)
Cambridge Master Fund	$	44,132	$	937,924	$	982,056

	For the six months ended June 30, 2017
	Net Investment Income		Total Trading Results		Net Income (Loss)
Cambridge Master Fund	$	63,518	$	5,659,416	$	5,722,934

(1)	From February 1, 2018, the date the Partnership invested into AE Capital Master Fund, through June 30, 2018.

8.	Subsequent Events:

The General Partner evaluates events that occur after the balance sheet date but before and up until financial statements are available to be issued. The General Partner has assessed the subsequent events through the date the financial statements were issued and has determined that there were no subsequent events requiring adjustment to or disclosure in the financial statements.

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.

Liquidity and Capital Resources

The Partnership does not have, nor does it expect to have, any capital assets. The Partnership does not engage in sales of goods or services. Its assets are its (i) investment in the Master Fund(s), (ii) equity in trading account, consisting of restricted and unrestricted cash, net unrealized appreciation on open futures contracts, net unrealized appreciation on open forward contracts, and investment in U.S. Treasury bills at fair value, if applicable, (iii) redemptions receivable from the Master Fund(s), (iv) cash at bank, (v) expense reimbursement receivable and (vi) interest receivable. Because of the low margin deposits normally required in commodity futures trading, relatively small price movements may result in substantial losses to the Partnership, through its direct investments and investment in the Master Funds. While substantial losses could lead to a material decrease in liquidity, no such illiquidity occurred in the second quarter of 2018.

The Partnership’s/Master Funds’ investment in Futures Interests may, from time to time, be illiquid. Most U.S. futures exchanges limit fluctuations in prices during a single day by regulations referred to as “daily price fluctuation limits” or “daily limits.” Trades may not be executed at prices beyond the daily limit. If the price for a particular futures or option contract has increased or decreased by an amount equal to the daily limit, positions in that futures or option contract can neither be taken nor liquidated unless traders are willing to effect trades at or within the limit. Futures prices have occasionally moved the daily limit for several consecutive days with little or no trading. These market conditions could prevent the Partnership/Master Funds from promptly liquidating its futures or option contracts and result in restrictions on redemptions.

There is no limitation on daily price movements in trading forward contracts on foreign currencies. The markets for some world currencies have low trading volume and are illiquid, which may prevent the Partnership/Master Funds from trading in potentially profitable markets or prevent the Partnership/Master Funds from promptly liquidating unfavorable positions in such markets, subjecting it to substantial losses. Either of these market conditions could result in restrictions on redemptions. For the periods covered by this report, illiquidity has not materially affected the Partnership’s assets.

Other than the risks inherent in Futures Interests trading and U.S. Treasury bills and money market mutual fund securities, the Partnership knows of no trends, demands, commitments, events or uncertainties at the present time that are reasonably likely to result in the Partnership’s liquidity increasing or decreasing in any material way.

The Partnership’s capital consists of the capital contributions, as increased or decreased by net realized and/or unrealized gains or losses on trading and by expenses, interest income, subscriptions, and redemptions of Units and distributions of profits, if any.

For the six months ended June 30, 2018, the Partnership’s capital decreased 9.8% from $6,433,098 to $5,802,325. This decrease was attributable to redemptions of 86,079.178 Class A limited partner Units totaling $742,972 and redemptions of 8,199.927 Class A General Partner Units totaling $70,239, which was partially offset by subscriptions of 7,027.337 Class Z General Partner Units totaling $70,274 and net income of $112,164. Future redemptions can impact the amount of funds available for investment in subsequent periods.

Other than as discussed above, there are no known material trends, favorable or unfavorable, that would affect, nor any expected material changes to, the Partnership’s capital resource arrangements at the present time.

Off-Balance Sheet Arrangements and Contractual Obligations

The Partnership does not have anyoff-balance sheet arrangements, nor does it have contractual obligations or commercial commitments to make future payments, that would affect its liquidity or capital resources.

Critical Accounting Policies

The preparation of financial statements in conformity with GAAP requires the General Partner to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the financial statements and the reported amounts of income and expense during the reporting period. The General Partner believes that the estimates and assumptions utilized in preparing the financial statements are reasonable. Actual results could differ from those estimates. The Partnership’s significant accounting policies are described in detail in Note 2, “Basis of Presentation and Summary of Significant Accounting Policies,” of the Financial Statements.

The Partnership and the Master Funds record all investments at fair value in its financial statements, with changes in fair value reported as a component of net realized gains (losses) and net change in unrealized gains (losses) in the Statements of Income and Expenses.

Results of Operations

General. The Partnership’s results depend on the Trading Advisors and the ability of each Trading Advisor’s trading program to take advantage of price movements in the Futures Interests markets.

Cambridge employs a series of systematic proprietary decision tools to identify trading opportunities in the global currency markets. The process combines three types of trading strategies: a systematic technical strategy, a systematic fundamental strategy and a Market Information Strategy. These trading tools are utilized in a set of systematic strategies which are combined into investment portfolios and are designed to perform across diverse market environments. The Systematic Fundamental Strategy is used in the Asian currency section of the Cambridge portfolios and reflects a predetermined set of positions designed to reflect “market” views on the relative attractiveness of Asian currencies versus the US dollar. Assets are allocated to the Systematic Fundamental Strategy based on a proprietary measure of volatility in the global currency markets (in highly volatile markets the allocation is reduced and when volatility is low the allocation is increased). The Market Information Strategy leverages the experience and global network of the portfolio managers to understand and exploit the behavior of other market participants and to participate in hedging and investment flows. Cambridge believes that long run success is achieved through successful mitigation of downside returns with risk controlled at the portfolio, strategy and individual trade levels.

Greenwave’s Flagship Plus Program (the “Program”) is a Discretionary Global Macro strategy with an emphasis on trading G20 currencies. The Program incorporates atwo-step investment process. Greenwave begins with top down, macroeconomic analysis to determine the fundamental themes in which to engage. The goal is to identify the dominant drivers in the current market environment with a focus on central bank activity, political trends, and geopolitical events. From this, Greenwave develops fundamental themes typically looking six to twelve months forward. In the second step, Greenwave employs a multi-layered quantitative process to identify the optimal timing and trade location at which to deploy risk in these themes. While themes are typically six to twelve months in duration, Greenwave will tactically trade around these core exposures.

P/E Global trades its FX Strategy Standard – MS Program on behalf of the Partnership. The FX Strategy Standard – MS Program, a proprietary investment strategy, is focused on the global currency markets. The FX Strategy Standard – MS Program is based on the belief of P/E Global that, by combining effective diversification, through analysis and continuous risk management, the investment objectives of the FX Strategy Standard – MS Program can be met with greater consistency.

The FX Strategy Standard – MS Program employs a quantitative Bayesian statistical approach that takes advantage of inefficiencies in the global markets, analyzing fundamental factors in a disciplined format and adjusting to market changes.

AE Capital trades its AE Systematic FX Fund Program on behalf of the Partnership. AE Capital’s philosophy is that markets are driven by fundamental themes and that those fundamental themes inherently change over time. The AE Systematic FX Fund Program, a proprietary systematic strategy, dynamically adapts to the fundamental themes quantified to be driving markets. New themes are identified by AE Capital primarily through fundamental research. Once a new theme is scientifically tested and deemed eligible it is incorporated into the theme adapting system framework. Capital is only allocated to a theme if the theme adapting system determines that the theme carries statistically significant information and improves the overall portfolio. Risk is minimized through a propriety portfolio construction technique that diversifies the portfolio in terms of the underlying currency exposures, trade time horizons and fundamental views.

The General Partner is not aware of any material changes to the trading programs discussed above during the fiscal quarter ended June 30, 2018.

The following chart sets forth the percentage and the amount of the Partnership’s net assets allocated to each Trading Advisor as of June 30, 2018 and March 31, 2018, respectively, and the change during the three months ended June 30, 2018.


Trading Advisor	Allocation as of June 30, 2018 (%)		Allocation as of March 31, 2018 (%)		Allocation as of June 30, 2018 ($)		Allocation as of March 31, 2018 ($)		Change during the period (%)

Cambridge		5.82 %		8.27 %	$	337,753	$	508,105		(33.53) %
Greenwave		35.43		32.61		2,056,037		2,004,450		2.57
P/E Global		21.92		21.40		1,271,789		1,315,721		(3.34)
AE Capital		36.83		37.72		2,136,746		2,319,268		(7.87)

The following presents a summary of the Partnership’s operations for the three and six months ended June 30, 2018 and 2017, and a general discussion of its trading activities during each period. It is important to note, however, that the Trading Advisors trade in various markets at different times and that prior activity in a particular market does not mean that such market will be actively traded by the Trading Advisors or will be profitable in the future. Consequently, the results of operations of the Partnership are difficult to discuss other than in the context of the Trading Advisors’ trading activities on behalf of the Partnership during the period in question. Past performance is no guarantee of future results.

The Partnership’s results of operations set forth in the financial statements are prepared in accordance with GAAP, which require the use of certain accounting policies that affect the amounts reported in these financial statements, including the following: the contracts the Partnership and the Master Funds trade are accounted for on a trade-date basis and marked to market on a daily basis. The difference between their original contract value and market value is recorded in the Statements of Income and Expenses as “Net change in unrealized gains (losses) on open contracts” and “Net change in unrealized gains (losses) on open contracts allocated from the Master Funds” on open contracts, and recorded as “Net realized gains (losses) on closed contracts” and “Net realized gains (losses) on closed contracts allocated from the Master Funds,” when open positions are closed out. The sum of these amounts constitutes the Partnership’s trading results. The market value of a futures contract is the settlement price on the exchange on which that futures contract is traded on a particular day. The value of a foreign currency forward contract is based on the spot rate as of approximately 3:00 P.M. (E.T.), the close of the business day. Interest income, as well as management fees, incentive fees, General Partner fees and ongoing placement agent fees of the Partnership are recorded on an accrual basis.

The General Partner believes that, based on the nature of the operations of the Partnership, no assumptions relating to the application of critical accounting policies other than those presently used could reasonably affect reported amounts.

During the Partnership’s second quarter of 2018, the Partnership’s net asset value per Class A Unit increased 1.6% from $8.57 to $8.71 as compared to an increase of 0.8% during the second quarter of 2017. During the Partnership’s second quarter of 2018, the Partnership’s net asset value per Class Z Unit increased 2.2% from $10.00 to $10.22. The Partnership experienced a net trading gain before fees and expenses in the second quarter of 2018 of $177,063. Gains were primarily attributable to the Partnership’s/Master Funds’ trading in currencies, energy, U.S. andnon-U.S. interest rates and indices and were partially offset by losses in metals. The Partnership, through its investment in Cambridge Master Fund, experienced a net trading gain before fees and expenses in the second quarter of 2017 of $180,998. Gains were primarily attributable to Cambridge Master Fund’s trading in currencies.

The most notable gains were experienced during May and June from short positions in the euro and British pound as the value of the U.S. dollar strengthened against its major counterparts. Additional gains were recorded from positions in the Hungarian forint, Japanese yen, Korean won, and New Zealand dollar. A portion of the Partnership’s trading gains for the second quarter was offset by losses incurred from positions in the Australian dollar, South African rand, Indian rupee, and Russian ruble.

During the Partnership’s six months ended June 30, 2018, the Partnership’s net asset value per Unit increased 1.9% from $8.55 to $8.71 as compared to an increase of 9.3% in the six months ended June 30, 2017. For the period from April 1, 2018 (date of first issuance) to June 30, 2018, the Partnership’s net asset value per Class Z Unit increased 2.2% from $10.00 to $10.22. The Partnership experienced a net trading gain before fees and expenses in the six months ended June 30, 2018 of $246,098. Gains were primarily attributable to the Partnership’s/Master Funds’ trading in currencies, energy and U.S. interest rates and were partially offset by losses innon-U.S. interest rates, metals and indices. The Partnership, through its investment in Cambridge Master Fund, experienced a net trading gain before fees and expenses in the six months ended June 30, 2017 of $1,023,117. Gains were primarily attributable to Cambridge Master Fund’s trading in currencies.

The most notable gains were experienced during the second quarter from short positions in the euro and British pound as the value of the U.S. dollar strengthened against its major counterparts. Additional gains were recorded from positions in the Chinese renminbi, Canadian dollar, Thai baht, Singapore dollar, and Taiwan dollar. A portion of the Partnership’s trading gains for the first six months of the year was offset by losses incurred from positions in the Australian dollar Indonesian rupiah, Indian Rupee, and Columbian peso.

Item 3. Quantitative and Qualitative Disclosures About Market Risk.

The Partnership and the Master Funds are speculative commodity pools. The market sensitive instruments held by the Partnership/Master Funds are acquired for speculative trading purposes, and all or substantially all of the Partnership’s/Master Funds’ assets are subject to the risk of trading loss. Unlike an operating company, the risk of market sensitive instruments is integral, not incidental, to the Partnership’s and the Master Funds’ main line of business.

The limited partners will not be liable for losses exceeding the current net asset value of their investment.

Market movements result in frequent changes in the fair value of the Partnership’s/Master Funds’ open positions and, consequently, in their earnings and cash balances. The Partnership’s/Master Funds’ market risk is influenced by a wide variety of factors, including the level and volatility of interest rates, exchange rates, equity price levels, the market value of financial instruments and contracts, the diversification effects of the Partnership’s/Master Funds’ open contracts and the liquidity of the markets in which they trade.

The Partnership/Master Funds rapidly acquire and liquidate both long and short positions in a wide range of different markets. Consequently, it is not possible to predict how a particular future market scenario will affect performance, and the Partnership’s/Master Funds’ past performance is not necessarily indicative of future results.

Quantifying the Partnership’s and the Master Funds’ Trading Value at Risk

The following quantitative disclosures regarding the Partnership’s and the Master Funds’ market risk exposures contain “forward-looking statements” within the meaning of the safe harbor from civil liability provided for such statements by the Private Securities Litigation Reform Act of 1995 (set forth in Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”)). All quantitative disclosures in this section are deemed to be forward-looking statements for purposes of the safe harbor, except for statements of historical fact.

The Partnership and the Master Funds account for open positions on the basis of fair value accounting principles. Any loss in the market value of the Partnership’s/Master Funds’ open positions are directly reflected in the Partnership’s/Master Funds’ earnings and cash flow.

The Partnership’s and the Master Funds’ risk exposure in the market sectors traded by the Trading Advisors is estimated below in terms of Value at Risk. Please note that the Value at Risk model is used to numerically quantify market risk for historic reporting purposes only and is not utilized by either Ceres or the Trading Advisors in their daily risk management activities.

“Value at Risk” is a measure of the maximum amount which the Partnership/Master Funds could reasonably be expected to lose in a given market sector. However, the inherent uncertainty of the Partnership’s/Master Funds’ speculative trading and the recurrence in the markets traded by the Partnership/Master Funds of market movements far exceeding expectations could result in actual trading ornon-trading losses far beyond the indicated Value at Risk or the Partnership’s/Master Funds’ experience to date (i.e., “risk of ruin”). In light of the foregoing as well as the risks and uncertainties intrinsic to all future projections, the inclusion of the quantification in this section should not be considered to constitute any assurance or representation that the Partnership’s/Master Funds’ losses in any market sector will be limited to Value at Risk or by the Partnership’s/Master Funds’ attempts to manage its market risk.

Exchange margin requirements have been used by the Partnership/Master Funds as the measure of its Value at Risk. Margin requirements are set by exchanges to equal or exceed the maximum losses reasonably expected to be incurred in the fair value of any given contract in95%-99% of anyone-day interval. The margin levels are established by dealers and exchanges using historical price studies as well as an assessment of current market volatility (including the implied volatility of the options on a given futures contract) and economic fundamentals to provide a probabilistic estimate of the maximum expected near-termone-day price fluctuation.

Value at Risk tables represent a probabilistic assessment of the risk of loss in market risk sensitive instruments. P/E Global and Greenwave directly trade in managed accounts in the name of the Partnership. Cambridge and AE Capital each trade the Partnership’s assets indirectly in master fund managed accounts established in the name of the Master Fund over which it has been granted limited authority to make trading decisions. The first trading Value at Risk table reflects the market sensitive instruments held by the Partnership directly and through its investment in the Master Funds. The remaining trading Value at Risk tables reflect the market sensitive instruments held by the Partnership directly (i.e. in the managed accounts in the Partnership’s name traded by certain Trading Advisors) and indirectly by each Master Fund separately. There has been no material change in the trading Value at Risk information previously disclosed in the Partnership’s Annual Report on Form10-K for the year ended December 31, 2017.

The following table indicates the trading Value at Risk associated with the Partnership’s open positions by market category as of June 30, 2018. As of June 30, 2018, the Partnership’s total capitalization was $5,802,325.

June 30, 2018


Market Sector	Value at Risk		% of Total Capitalization
Currencies	$	245,616		4.23	%
Interest Rates U.S.		2,530		0.05

Total	$	248,146		4.28	%

As of December 31, 2017, the Partnership’s only investment was its investment in Cambridge Master Fund.

The following tables indicate the trading Value at Risk associated with the Partnership’s direct investments as of June 30, 2018 and indirect investment in the Master Fund(s) by market category as of June 30, 2018 and December 31, 2017, and the highest, lowest and average values during the three months ended June 30, 2018 and the twelve months ended December 31, 2017. All open position trading risk exposures have been included in calculating the figures set forth below.

As of June 30, 2018 the Partnership’s Value at Risk for the portion of its assets that are traded directly was as follows:

June 30, 2018


						Three Months Ended June 30, 2018
Market Sector	Value at Risk		% of Total Capitalization			High Value at Risk		Low Value at Risk		Average Value at Risk*
Currencies	$	92,337		1.59	%	$	141,125	$	61,050	$	85,415
Interest Rates U.S.		2,530		0.04			15,706		-		843

Total	$	94,867		1.63	%

* Average ofmonth-end Values at Risk.

The Partnership did not trade directly as of December 31, 2017.

As of June 30, 2018, Cambridge Master Fund’s total capitalization was $32,277,345 and the Partnership owned approximately 1.0% of Cambridge Master Fund. As of June 30, 2018, Cambridge Master Fund’s Value at Risk for its assets (including the portion of the Partnership’s assets allocated to Cambridge for trading) was as follows:

June 30, 2018


						Three Months Ended June 30, 2018
Market Sector	Value at Risk		% of Total Capitalization			High Value at Risk		Low Value at Risk		Average Value at Risk*
Currencies	$	15,327,893		47.49	%	$	25,625,946	$	8,893,418	$	14,057,357

Total	$	15,327,893		47.49	%

* Average ofmonth-end Values at Risk.

Prior to the close of business on December 31, 2017, Cambridge Master Fund’s total capitalization was $30,318,252 and the Partnership owned approximately 22.9% of Cambridge Master Fund. As of December 31, 2017, Cambridge Master Fund’s Value at Risk for its assets (including the portion of the Partnership’s assets allocated to Cambridge for trading) was as follows:

December 31, 2017


						Twelve Months Ended December 31, 2017
Market Sector	Value at Risk		% of Total Capitalization			High Value at Risk		Low Value at Risk		Average Value at Risk*
Currencies	$	8,074,088		26.63	%	$	33,190,552	$	6,699,509	$	17,900,275

Total	$	8,074,088		26.63	%

* Annual average ofmonth-end Values at Risk.

As of June 30, 2018, AE Capital Master Fund’s total capitalization was $24,497,210 and the Partnership owned approximately 8.7% of AE Capital Master Fund. As of June 30, 2018, AE Capital Master Fund had no Value at Risk for its assets (including the portion of the Partnership’s assets allocated to AE Capital for trading).

Item 4. Controls and Procedures.

The Partnership’s disclosure controls and procedures are designed to ensure that information required to be disclosed by the Partnership on the reports that it files or submits under the Exchange Act is recorded, processed, summarized and reported within the time periods expected in the SEC’s rules and forms. Disclosure controls and procedures include controls and procedures designed to ensure that information required to be disclosed by the Partnership in the reports it files is accumulated and communicated to management, including the President and Chief Financial Officer (the “CFO”) of the General Partner, to allow for timely decisions regarding required disclosure and appropriate SEC filings.

The General Partner is responsible for ensuring that there is an adequate and effective process for establishing, maintaining and evaluating disclosure controls and procedures for the Partnership’s external disclosures.

The General Partner’s President and CFO have evaluated the effectiveness of the Partnership’s disclosure controls and procedures (as defined in Rules13a-15(e) and15d-15(e) under the Exchange Act) as of June 30, 2018, and, based on that evaluation, the General Partner’s President and CFO have concluded that, at that date, the Partnership’s disclosure controls and procedures were effective.

The Partnership’s internal control over financial reporting is a process under the supervision of the General Partner’s President and CFO to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements in accordance with GAAP. These controls include policies and procedures that:

•

pertain to the maintenance of records, that in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the Partnership;

•

provide reasonable assurance that (i) transactions are recorded as necessary to permit preparation of financial statements in accordance with GAAP, and (ii) the Partnership’s receipts are handled and expenditures are made only pursuant to authorizations of the General Partner; and

•

provide reasonable assurance regarding prevention or timely detection and correction of unauthorized acquisition, use or disposition of the Partnership’s assets that could have a material effect on the financial statements.

There were no changes in the Partnership’s internal control over financial reporting process during the fiscal quarter ended June 30, 2018 that materially affected, or are reasonably likely to materially affect, the Partnership’s internal control over financial reporting.

PART II. OTHER INFORMATION

Item 1. Legal Proceedings.

This section describes the major pending legal proceedings, other than ordinary routine litigation incidental to the business, to which MS&Co. or its subsidiaries is a party or to which any of their property is subject. There are no material legal proceedings pending against the Partnership or the General Partner.

On June 1, 2011, Morgan Stanley & Co. Incorporated converted from a Delaware corporation to a Delaware limited liability company. As a result of that conversion, Morgan Stanley & Co. Incorporated is now named Morgan Stanley & Co. LLC (“MS&Co.”).

MS&Co. is a wholly-owned, indirect subsidiary of Morgan Stanley, a Delaware holding company. Morgan Stanley files periodic reports with the SEC as required by the Securities Exchange Act of 1934, as amended (the “Exchange Act”), which include current descriptions of material litigation and material proceedings and investigations, if any, by governmental and/or regulatory agencies or self-regulatory organizations concerning Morgan Stanley and its subsidiaries, including MS&Co. As a consolidated subsidiary of Morgan Stanley, MS&Co. does not file its own periodic reports with the SEC that contain descriptions of material litigation, proceedings and investigations. As a result, we refer you to the “Legal Proceedings” section of Morgan Stanley’s SEC 10-K filings for 2017, 2016, 2015, 2014 and 2013. In addition, MS&Co. annually prepares an Audited, Consolidated Statement of Financial Condition (“Audited Financial Statement”) that is publicly available on Morgan Stanley’s website at www.morganstanley.com. We refer you to the Commitments, Guarantees and Contingencies – Legal section of MS&Co.’s 2017 Audited Financial Statement.

In addition to the matters described in those filings, in the normal course of business, each of Morgan Stanley and MS&Co. has been named, from time to time, as a defendant in various legal actions, including arbitrations, class actions, and other litigation, arising in connection with its activities as a global diversified financial services institution. Certain of the legal actions include claims for substantial compensatory and/or punitive damages or claims for indeterminate amounts of damages. Each of Morgan Stanley and MS&Co. is also involved, from time to time, in investigations and proceedings by governmental and/or regulatory agencies or self-regulatory organizations, certain of which may result in adverse judgments, fines or penalties. The number of these investigations and proceedings has increased in recent years with regard to many financial services institutions, including Morgan Stanley and MS&Co.

MS&Co. is a Delaware limited liability company with its main business office located at 1585 Broadway, New York, New York 10036. Among other registrations and memberships, MS&Co. is registered as a futures commission merchant and is a member of the National Futures Association.

Regulatory and Governmental Matters.

On February 25, 2015, the Company reached an agreement in principle with the United States Department of Justice, Civil Division and the United States Attorney’s Office for the Northern District of California, Civil Division (collectively, the “Civil Division”) to pay $2.6 billion to resolve certain claims that the Civil Division indicated it intended to bring against MS&Co. That settlement was finalized on February 10, 2016.

In October 2014, the Illinois Attorney General’s Office (“ILAG”) sent a letter to MS&Co. alleging that MS&Co. knowingly made misrepresentations related to RMBS purchased by certain pension funds affiliated with the State of Illinois and demanding that MS&Co. pay ILAG approximately $88 million. MS&Co. and ILAG reached an agreement to resolve the matter on February 10, 2016.

On January 13, 2015, the New York Attorney General’s Office (“NYAG”), which is also a member of the RMBS Working Group, indicated that it intended to file a lawsuit related to approximately 30 subprime securitizations sponsored by MS&Co. NYAG indicated that the lawsuit would allege that MS&Co. misrepresented or omitted material information related to the due diligence, underwriting and valuation of the loans in the securitizations and the properties securing them and indicated that its lawsuit would be brought under the Martin Act. MS&Co. and NYAG reached an agreement to resolve the matter on February 10, 2016.

On June 5, 2012, MS&Co. consented to and became the subject of an Order Instituting Proceedings Pursuant to Sections 6(c) and 6(d) of the Commodity Exchange Act, as amended, Making Findings and Imposing Remedial Sanctions by The Commodity Futures Trading Commission (“CFTC”) to resolve allegations related to the failure of a salesperson to comply with exchange rules that prohibit off-exchange futures transactions unless there is an Exchange for Related Position (EFRP). Specifically, the CFTC found that from April 2008 through October 2009, MS&Co. violated Section 4c(a) of the Commodity Exchange Act, as amended (the “CEA”) and CFTC Regulation 1.38 by executing, processing and reporting numerous off-exchange futures trades to the Chicago Mercantile Exchange (“CME”) and Chicago Board of Trade (“CBOT”) as EFRPs in violation of CME and CBOT rules because those trades lacked the corresponding and related cash, OTC swap, OTC option, or other OTC derivative position. In addition, the CFTC found that MS&Co. violated CFTC Regulation 166.3 by failing to supervise the handling of the trades at issue and failing to have adequate policies and procedures designed to detect and deter the violations of the CEA and CFTC Regulations. Without admitting or denying the underlying allegations and without adjudication of any issue of law or fact, MS&Co. accepted and consented to entry of findings and the imposition of a cease and desist order, a fine of $5,000,000, and undertakings related to public statements, cooperation and payment of the fine. MS&Co. entered into corresponding and related settlements with the CME and CBOT in which the CME found that MS&Co. violated CME Rules 432.Q and 538 and fined MS&Co. $750,000 and CBOT found that MS&Co. violated CBOT Rules 432.Q and 538 and fined MS&Co. $1,000,000.

On July 23, 2014, the SEC approved a settlement by MS&Co. and certain affiliates to resolve an investigation related to certain subprime RMBS transactions sponsored and underwritten by those entities in 2007. Pursuant to the settlement, MS&Co. and certain affiliates were charged with violating Sections 17(a)(2) and 17(a)(3) of the Securities Act, agreed to pay disgorgement and penalties in an amount of $275 million and neither admitted nor denied the SEC’s findings.

On April 21, 2015, the Chicago Board Options Exchange, Incorporated (CBOE) and the CBOE Futures Exchange, LLC (CFE) filed statements of charges against MS&Co. in connection with trading by one of MS&Co.’s former traders of EEM options contracts that allegedly disrupted the final settlement price of the November 2012 VXEM futures. CBOE alleged that MS&Co. violated CBOE Rules 4.1, 4.2 and 4.7, Sections 9(a) and 10(b) of the Exchange Act, and Rule 10b-5 thereunder. CFE alleged that MS&Co. violated CFE Rules 608, 609 and 620. The matters were resolved on June 28, 2016 without any findings of fraud.

On June 18, 2015, MS&Co. entered into a settlement with the SEC and paid a fine of $500,000 as part of the MCDC Initiative to resolve allegations that MS&Co. failed to form a reasonable basis through adequate due diligence for believing the truthfulness of the assertions by issuers and/or obligors regarding their compliance with previous continuing disclosure undertakings pursuant to Rule 15c2-12 in connection with offerings in which MS&Co. acted as senior or sole underwriter.

On August 6, 2015, MS&Co. consented to and became the subject of an order by the CFTC to resolve allegations that MS&Co. violated CFTC Regulation 22.9(a) by failing to hold sufficient US Dollars in cleared swap segregated accounts in the United States to meet all US Dollar obligations to cleared swaps customers. Specifically, the CFTC found that while MS&Co. at all times held sufficient funds in segregation to cover its obligations to its customers, on certain days during 2013 and 2014, it held currencies, such as euros, instead of US dollars, to meet its US dollar obligations. In addition, the CFTC found that MS&Co. violated CFTC Regulation 166.3 by failing to have in place adequate procedures to ensure that it complied with CFTC Regulation 22.9(a). Without admitting or denying the findings or conclusions and without adjudication of any issue of law or fact, MS&Co. accepted and consented to the entry of findings, the imposition of a cease and desist order, a civil monetary penalty of $300,000, and undertakings related to public statements, cooperation, and payment of the monetary penalty.

On December 20, 2016, MS&Co. consented to and became the subject of an order by the SEC in connection with allegations that MS&Co. willfully violated Sections 15(c)(3) and 17(a)(1) of the Exchange Act and Rules 15c3-3(e), 17a-5(a), and 17a-5(d) thereunder, by inaccurately calculating its Reserve Account requirement under Rule 15c3-3 by including margin loans to an affiliate in its calculations, which resulted in making inaccurate records and submitting inaccurate reports to the SEC. Without admitting or denying the underlying allegations and without adjudication of any issue of law or fact, MS&Co. consented to a cease and desist order, a censure, and a civil monetary penalty of $7,500,000.

On September 28, 2017, the CFTC issued an order filing and simultaneously settling charges against MS&Co. regarding violations of CFTC Rule 166.3 by failing to diligently supervise the reconciliation of exchange and clearing fees with the amounts it ultimately charged customers for certain transactions on multiple exchanges. The order and settlement required MS&Co. to pay a $500,000 penalty and cease and desist from violating Rule 166.3.

On November 2, 2017, the CFTC issued an order filing and simultaneously settling charges against MS&Co. for non-compliance with applicable rules governing Part 17 Large Trader reports to the CFTC. The order requires MS&Co. to pay a $350,000 penalty and cease and desist from further violations of the Commodity Exchange Act.

Civil Litigation

On July 15, 2010, China Development Industrial Bank (“CDIB”) filed a complaint against MS&Co, styledChina Development Industrial Bank v. Morgan Stanley & Co. Incorporated et al., which is pending in the Supreme Court of the State of New York, New York County (“Supreme Court of NY”). The complaint relates to a $275 million credit default swap referencing the super senior portion of the STACK 2006-1 CDO. The complaint asserts claims for common law fraud, fraudulent inducement and fraudulent concealment and alleges that MS&Co. misrepresented the risks of the STACK 2006-1 CDO to CDIB, and that MS&Co. knew that the assets backing the CDO were of poor quality when it entered into the credit default swap with CDIB. The complaint seeks compensatory damages related to the approximately $228 million that CDIB alleges it has already lost under the credit default swap, rescission of CDIB’s obligation to pay an additional $12 million, punitive damages, equitable relief, fees and costs. On February 28, 2011, the court denied MS&Co.’s motion to dismiss the complaint. On June 27, 2018, the Firm filed a motion for summary judgment and spoliation sanctions against CDIB. Based on currently available information, MS&Co. believes it could incur a loss in this action of up to approximately $240 million plus pre- and post-judgment interest, fees and costs.

On October 15, 2010, the Federal Home Loan Bank of Chicago filed a complaint against MS&Co. and other defendants in the Circuit Court of the State of Illinois, styledFederal Home Loan Bank of Chicago v. Bank of America Funding Corporation et al. A corrected amended complaint was filed on April 8, 2011, which alleges that defendants made untrue statements and material omissions in the sale to plaintiff of a number of mortgage pass-through certificates backed by securitization trusts containing residential mortgage loans and asserts claims under Illinois law. The total amount of certificates allegedly sold to plaintiff by MS&Co. at issue in the action was approximately $203 million. The complaint seeks, among other things, to rescind the plaintiff’s purchase of such certificates. The defendants filed a motion to dismiss the corrected amended complaint on May 27, 2011, which was denied on September 19, 2012. On December 13, 2013, the court entered an order dismissing all claims related to one of the securitizations at issue. On January 18, 2017, the court entered an order dismissing all claims related to an additional securitization at issue. After those dismissals, the remaining amount of certificates allegedly issued by MS&Co. or sold to plaintiff by MS&Co. was approximately $65 million. At June 25, 2018, the current unpaid balance of the mortgage pass-through certificates at issue in this action was approximately $37 million, and the certificates had not yet incurred actual losses. Based on currently available information, MS&Co. believes it could incur a loss in this action up to the difference between the $37 million unpaid balance of these certificates (plus any losses incurred) and their fair market value at the time of a judgment against MS&Co., plus pre- and post-judgment interest, fees and costs. MS&Co. may be entitled to be indemnified for some of these losses and to an offset for interest received by the plaintiff prior to a judgment.

On May 17, 2013, plaintiff inIKB International S.A. in Liquidation, et al. v. Morgan Stanley, et al. filed a complaint against MS&Co. and certain affiliates in the Supreme Court of NY. The complaint alleges that defendants made material misrepresentations and omissions in the sale to plaintiff of certain mortgage pass-through certificates backed by securitization trusts containing residential mortgage loans. The total amount of certificates allegedly sponsored, underwritten and/or sold by MS&Co. to plaintiff was approximately $133 million. The complaint alleges causes of action against MS&Co. for common law fraud, fraudulent concealment, aiding and abetting fraud, and negligent misrepresentation, and seeks, among other things, compensatory and punitive damages. On October 29, 2014, the court granted in part and denied in part MS&Co.’s motion to dismiss. All claims regarding four certificates were dismissed. After these dismissals, the remaining amount of certificates allegedly issued by MS&Co. or sold to plaintiff by MS&Co. was approximately $116 million. On August 11, 2016, the Appellate Division, First Department affirmed the trial court’s decision denying in part MS&Co.’s motion to dismiss the complaint. At June 25, 2018, the current unpaid balance of the mortgage pass-through certificates at issue in this action was approximately $24 million, and the certificates had incurred actual losses of $58 million. Based on currently available information, MS&Co. believes it could incur a loss in this action up to the difference between the $24 million unpaid balance of these certificates (plus any losses incurred) and their fair market value at the time of a judgment against MS&Co., or upon sale, plus pre- and post-judgment interest, fees and costs. MS&Co. may be entitled to be indemnified for some of these losses and to an offset for interest received by the plaintiff prior to a judgment.

On April 1, 2016, the California Attorney General’s Office filed an action against MS&Co. in California state court styledCalifornia v. Morgan Stanley, et al., on behalf of California investors, including the California Public Employees’ Retirement System and the California Teachers’ Retirement System. The complaint alleges that MS&Co. made misrepresentations and omissions regarding residential mortgage-backed securities and notes issued by the Cheyne SIV, and asserts violations of the California False Claims Act and other state laws and seeks treble damages, civil penalties, disgorgement, and injunctive relief. On September 30, 2016, the court granted MS&Co.’s demurrer, with leave to replead. On October 21, 2016, the California Attorney General filed an amended complaint. On January 25, 2017, the court denied MS&Co.’s demurrer with respect to the amended complaint.

Settled Civil Litigation

On December 23, 2009, the Federal Home Loan Bank of Seattle filed a complaint against MS&Co. and another defendant in the Superior Court of the State of Washington, styledFederal Home Loan Bank of Seattle v. Morgan Stanley & Co. Inc., et al. The amended complaint, filed on September 28, 2010, alleges that defendants made untrue statements and material omissions in the sale to plaintiff of certain mortgage pass-through certificates backed by securitization trusts containing residential mortgage loans. The total amount of certificates allegedly sold to plaintiff by MS&Co. was approximately $233 million. The complaint raises claims under the Washington State Securities Act and seeks, among other things, to rescind the plaintiff’s purchase of such certificates. On January 23, 2017, the parties reached an agreement to settle the litigation.

On March 15, 2010, the Federal Home Loan Bank of San Francisco filed a complaint against MS&Co. and other defendants in the Superior Court of the State of California styledFederal Home Loan Bank of San Francisco v. Credit Suisse Securities (USA) LLC, et al. An amended complaint filed on June 10, 2010 alleged that defendants made untrue statements and material omissions in connection with the sale to plaintiff of a number of mortgage pass-through certificates backed by securitization trusts containing residential mortgage loans. The amount of certificates allegedly sold to plaintiff by MS&Co. was approximately $704 million. The complaint raised claims under both the federal securities laws and California law and sought, among other things, to rescind the plaintiff’s purchase of such certificates. On January 26, 2015, as a result of a settlement with certain other defendants, the plaintiff requested and the court subsequently entered a dismissal with prejudice of certain of the plaintiff’s claims, including all remaining claims against MS&Co..

On March 15, 2010, the Federal Home Loan Bank of San Francisco filed a complaint against MS&Co. and other defendants in the Superior Court of the State of California styledFederal Home Loan Bank of San Francisco v. Deutsche Bank Securities Inc. et al. An amended complaint, filed on June 10, 2010, alleges that defendants made untrue statements and material omissions in connection with the sale to plaintiff of certain mortgage pass-through certificates backed by securitization trusts containing residential mortgage loans. The amount of certificates allegedly sold to plaintiff by MS&Co. was approximately $276 million. The complaint raises claims under both the federal securities laws and California law and seeks, among other things, to rescind the plaintiff’s purchase of such certificates. On December 21, 2016, the parties reached an agreement to settle the litigation.

On July 9, 2010 and February 11, 2011, Cambridge Place Investment Management Inc. filed two separate complaints against MS&Co. and/or its affiliates and other defendants in the Superior Court of the Commonwealth of Massachusetts, both styledCambridge Place Investment Management Inc. v. Morgan Stanley & Co., Inc., et al. The complaints asserted claims on behalf of certain clients of plaintiff’s affiliates and allege that defendants made untrue statements and material omissions in the sale of a number of mortgage pass-through certificates backed by securitization trusts containing residential mortgage loans. The total amount of certificates allegedly issued by MS&Co. and/or its affiliates or sold to plaintiff’s affiliates’ clients by MS&Co. and/or its affiliates in the two matters was approximately $263 million. On February 11, 2014, the parties entered into an agreement to settle the litigation. On February 20, 2014, the court dismissed the action.

On October 25, 2010, MS&Co., certain affiliates and Pinnacle Performance Limited, a special purpose vehicle (“SPV”), were named as defendants in a purported class action in the United States District Court for the Southern District of New York (“SDNY”), styledGe Dandong, et al. v. Pinnacle Performance Ltd., et al. On January 31, 2014, the plaintiffs in the action, which related to securities issued by the SPV in Singapore, filed a second amended complaint, which asserted common law claims of fraud, aiding and abetting fraud, fraudulent inducement, aiding and abetting fraudulent inducement, and breach of the implied covenant of good faith and fair dealing. On July 17, 2014, the parties reached an agreement to settle the litigation, which received final court approval on July 2, 2015.

On July 5, 2011, Allstate Insurance Company and certain of its affiliated entities filed a complaint against MS&Co. in the Supreme Court of NY, styledAllstate Insurance Company, et al. v. Morgan Stanley, et al. An amended complaint was filed on September 9, 2011, and alleges that the defendants made untrue statements and material omissions in the sale to the plaintiffs of certain mortgage pass-through certificates backed by securitization trusts containing residential mortgage loans. The total amount of certificates allegedly issued and/or sold to the plaintiffs by MS&Co. was approximately $104 million. The complaint raised common law claims of fraud, fraudulent inducement, aiding and abetting fraud, and negligent misrepresentation and seeks, among other things, compensatory and/or recessionary damages associated with the plaintiffs’ purchases of such certificates. On January 16, 2015, the parties reached an agreement to settle the litigation.

On July 18, 2011, the Western and Southern Life Insurance Company and certain affiliated companies filed a complaint against MS&Co. and other defendants in the Court of Common Pleas in Ohio, styledWestern and Southern Life Insurance Company, et al. v. Morgan Stanley Mortgage Capital Inc., et al. An amended complaint was filed on April 2, 2012 and alleges that defendants made untrue statements and material omissions in the sale to plaintiffs of certain mortgage pass-through certificates backed by securitization trusts containing residential mortgage loans. The amount of the certificates allegedly sold to plaintiffs by MS&Co. was approximately $153 million. On June 8, 2015, the parties reached an agreement to settle the litigation.

On September 2, 2011, the Federal Housing Finance Agency (“FHFA”), as conservator for Fannie Mae and Freddie Mac, filed 17 complaints against numerous financial services companies, including MS&Co. and certain affiliates. A complaint against MS&Co. and certain affiliates and other defendants was filed in the Supreme Court of NY, styledFederal Housing Finance Agency, as Conservator v. Morgan Stanley et al. The complaint alleges that defendants made untrue statements and material omissions in connection with the sale to Fannie Mae and Freddie Mac of residential mortgage pass-through certificates with an original unpaid balance of approximately $11 billion. The complaint raised claims under federal and state securities laws and common law and seeks, among other things, rescission and compensatory and punitive damages. On February 7, 2014, the parties entered into an agreement to settle the litigation. On February 20, 2014, the court dismissed the action.

On April 25, 2012, Metropolitan Life Insurance Company and certain affiliates filed a complaint against MS&Co. and certain affiliates in the Supreme Court of NY, styledMetropolitan Life Insurance Company, et al. v. Morgan Stanley, et al. An amended complaint was filed on June 29, 2012, and alleges that the defendants made untrue statements and material omissions in the sale to the plaintiffs of certain mortgage pass-through certificates backed by securitization trusts containing residential mortgage loans. The total amount of certificates allegedly sponsored, underwritten, and/or sold by MS&Co. was approximately $758 million. The amended complaint raised common law claims of fraud, fraudulent inducement, and aiding and abetting fraud and seeks, among other things, rescission, compensatory, and/or rescissionary damages, as well as punitive damages, associated with the plaintiffs’ purchases of such certificates. On April 11, 2014, the parties entered into a settlement agreement.

On April 25, 2012, The Prudential Insurance Company of America and certain affiliates filed a complaint against MS&Co. and certain affiliates in the Superior Court of the State of New Jersey, styledThe Prudential Insurance Company of America, et al. v. Morgan Stanley, et al. On October 16, 2012, plaintiffs filed an amended complaint. The amended complaint alleged that defendants made untrue statements and material omissions in connection with the sale to plaintiffs of certain mortgage pass-through certificates backed by securitization trusts containing residential mortgage loans. The total amount of certificates allegedly sponsored, underwritten and/or sold by MS&Co. was approximately $1.073 billion. The amended complaint raises claims under the New Jersey Uniform Securities Law, as well as common law claims of negligent misrepresentation, fraud, fraudulent inducement, equitable fraud, aiding and abetting fraud, and violations of the New Jersey RICO statute, and includes a claim for treble damages. On January 8, 2016, the parties reached an agreement to settle the litigation.

In re Morgan Stanley Mortgage Pass-Through Certificates Litigation, which had been pending in the SDNY, was a putative class action involving allegations that, among other things, the registration statements and offering documents related to the offerings of certain mortgage pass-through certificates in 2006 and 2007 contained false and misleading information concerning the pools of residential loans that backed these securitizations. On December 18, 2014, the parties’ agreement to settle the litigation received final court approval, and on December 19, 2014, the court entered an order dismissing the action.

On November 4, 2011, the Federal Deposit Insurance Corporation (“FDIC”), as receiver for Franklin Bank S.S.B, filed two complaints against MS&Co. in the District Court of the State of Texas. Each was styledFederal Deposit Insurance Corporation as Receiver for Franklin Bank, S.S.B v. Morgan Stanley & Company LLC F/K/A Morgan Stanley & Co. Inc. and alleged that MS&Co. made untrue statements and material omissions in connection with the sale to plaintiff of mortgage pass-through certificates backed by securitization trusts containing residential mortgage loans. The amount of certificates allegedly underwritten and sold to plaintiff by MS&Co. in these cases was approximately $67 million and $35 million, respectively. On July 2, 2015, the parties reached an agreement to settle the litigation.

On February 14, 2013, Bank Hapoalim B.M. filed a complaint against MS&Co. and certain affiliates in the Supreme Court of NY, styledBank Hapoalim B.M. v. Morgan Stanley et al. The complaint alleges that defendants made material misrepresentations and omissions in the sale to plaintiff of certain mortgage pass-through certificates backed by securitization trusts containing residential mortgage loans. The total amount of certificates allegedly sponsored, underwritten and/or sold by MS&Co. to plaintiff was approximately $141 million. On July 28, 2015, the parties reached an agreement to settle the litigation, and on August 12, 2015, the plaintiff filed a stipulation of discontinuance with prejudice.

On September 23, 2013, the plaintiff inNational Credit Union Administration Board v. Morgan Stanley & Co. Inc., et al.filed a complaint against MS&Co. and certain affiliates in the SDNY. The complaint alleged that defendants made untrue statements of material fact or omitted to state material facts in the sale to the plaintiff of certain mortgage pass-through certificates issued by securitization trusts containing residential mortgage loans. The total amount of certificates allegedly sponsored, underwritten and/or sold by MS&Co. to plaintiffs in the matter was approximately $417 million. The complaint alleged violations of federal and various state securities laws and sought, among other things, rescissionary and compensatory damages. On November 23, 2015, the parties reached an agreement to settle the matter.

On September 16, 2014, the Virginia Attorney General’s Office filed a civil lawsuit, styledCommonwealth of Virginia ex rel. Integra REC LLC v. Barclays Capital Inc., et al., against MS&Co. and several other defendants in the Circuit Court of the City of Richmond related to RMBS. The lawsuit alleged that MS&Co. and the other defendants knowingly made misrepresentations and omissions related to the loans backing RMBS purchased by the Virginia Retirement System. The complaint asserts claims under the Virginia Fraud Against Taxpayers Act, as well as common law claims of actual and constructive fraud, and seeks, among other things, treble damages and civil penalties. On January 6, 2016, the parties reached an agreement to settle the litigation. An order dismissing the action with prejudice was entered on January 28, 2016.

On April 20, 2011, the Federal Home Loan Bank of Boston filed a complaint against MS&Co. and other defendants in the Superior Court of the Commonwealth of Massachusetts styledFederal Home Loan Bank of Boston v. Ally Financial, Inc. F/K/A GMAC LLC et al. An amended complaint was filed on June 29, 2012 and alleged that defendants made untrue statements and material omissions in the sale to plaintiff of certain mortgage pass-through certificates backed by securitization trusts containing residential mortgage loans. The total amount of certificates allegedly issued by MS&Co. or sold to plaintiff by MS&Co. was approximately $385 million. The amended complaint raised claims under the Massachusetts Uniform Securities Act, the Massachusetts Consumer Protection Act and common law and sought, among other things, to rescind the plaintiff’s purchase of such certificates. On November 25, 2013, July 16, 2014, and May 19, 2015, respectively, the plaintiff voluntarily dismissed its claims against MS&Co. with respect to three of the securitizations at issue. After these voluntary dismissals, the remaining amount of certificates allegedly issued by MS&Co. or sold to plaintiff by MS&Co. was approximately $332 million. On July 13, 2018, the parties reached an agreement in principle to settle the litigation.

On May 3, 2013, plaintiffs inDeutsche Zentral-Genossenschaftsbank AG et al. v. Morgan Stanley et al. filed a complaint against MS&Co., certain affiliates, and other defendants in the Supreme Court of NY. The complaint alleged that defendants made material misrepresentations and omissions in the sale to plaintiffs of certain mortgage pass-through certificates backed by securitization trusts containing residential mortgage loans. The total amount of certificates allegedly sponsored, underwritten and/or sold by MS&Co. to plaintiff was approximately $634 million. The complaint alleges causes of action against MS&Co. for common law fraud, fraudulent concealment, aiding and abetting fraud, negligent misrepresentation, and rescission and seeks, among other things, compensatory and punitive damages. On June 26, 2018, the parties entered into an agreement to settle the litigation.

Additional lawsuits containing claims similar to those described above may be filed in the future. In the course of its business, MS&Co., as a major futures commission merchant, is party to various civil actions, claims and routine regulatory investigations and proceedings that the General Partner believes do not have a material effect on the business of MS&Co. MS&Co. may establish reserves from time to time in connection with such actions.

Item 1A.Risk Factors.

There have been no material changes to the risk factors set forth under Part I, Item 1A. “Risk Factors.” in the Partnership’s Annual Report on Form 10-K for the fiscal year ended December 31, 2017 and under Part II, Item 1A. “Risk Factors.” in the Partnership’s Quarterly Report on Form10-Q for the quarter ended March 31, 2018.

Item 2.Unregistered Sales of Equity Securities and Use of Proceeds.

For the three months ended June 30, 2018, there were no subscriptions of Class A Units. Units are issued in reliance upon applicable exemptions from registration under Section 4(a)(2) of the Securities Act and Section 506 of Regulation D promulgated thereunder. Units are purchased by accredited investors as defined in Regulation D. In determining the applicability of the exemption, the General Partner relies on the fact that Units are purchased by accredited investors in a private offering.

Proceeds of net offerings are used in the trading of Futures Interests.

The following chart sets forth the purchases of Units by the Partnership.



Period	Class A (a) Total Number of Units Purchased *	Class A (b) Average Price Paid per Unit **	(c ) Total Number of Units Purchased as Part of Publicly Announced Plans or Programs	(d) Maximum Number (or Approximate Dollar Value) of Units that May Yet Be Purchased Under the Plans or Programs
April 1, 2018 - April 30, 2018	17,401.584	$ 8.61	N/A	N/A
May 1, 2018 - May 31, 2018	22,290.877	$ 8.63	N/A	N/A
June 1, 2018 - June 30, 2018	11,620.117	$ 8.71	N/A	N/A
	51,312.578	$ 8.64

* Generally, limited partners are permitted to redeem their Units as of the end of each month if notice is received by the General Partner no later than 3:00 P.M., New York City time, on the last day of the month in which the redemption is to be effective. Under certain circumstances, the General Partner can compel redemption, although to date, the General Partner has not exercised this right. Purchases of Units by the Partnership reflected in the chart above were made in the ordinary course of the Partnership’s business in connection with effecting redemptions for limited partners.

** Redemptions of Units are effected as of the end of each month at the net asset value per Unit as of that day. No fee will be charged for redemptions.

Item 3.Defaults Upon Senior Securities. —None.

Item 4.Mine Safety Disclosures.— Not applicable.

Item 5.Other Information.— None.

Item 6.Exhibits.



31.01		Certification of President of Ceres Managed Futures LLC, the General Partner of the Partnership, pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

31.02		Certification of Chief Financial Officer of Ceres Managed Futures LLC, the General Partner of the Partnership, pursuant to Section 302 of theSarbanes-Oxley Act of 2002.

32.01		Certification of President of Ceres Managed Futures LLC, the General Partner of the Partnership, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

32.02		Certification of Chief Financial Officer of Ceres Managed Futures LLC, the General Partner of the Partnership, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of theSarbanes-Oxley Act of 2002.

101.INS*		XBRL Instance Document

101.SCH*		XBRL Taxonomy Extension Schema Document

101.CAL*		XBRL Taxonomy Extension Calculation Linkbase Document

101.LAB*		XBRL Taxonomy Extension Label Document

101.PRE*		XBRL Taxonomy Extension Presentation Document

101.DEF*		XBRL Taxonomy Extension Definition Document

Notes to Exhibits List

*	Submitted electronically herewith.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

CERES TACTICAL CURRENCY L.P.


By: Ceres Managed Futures LLC
		(General Partner)

By:		/s/ Patrick T. Egan
		Patrick T. Egan
		President and Director

		Date: August 9, 2018

By:		/s/ Steven Ross
		Steven Ross
		Chief Financial Officer and Director
		(Principal Accounting Officer)

		Date: August 9, 2018

The General Partner which signed the above is the only party authorized to act for the registrant. The registrant has no principal executive officer, principal financial officer, controller, or principal accounting officer and has no Board of Directors.

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Ceres Tactical Global 10-Q2018 Q2 Quarterly report

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