FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
(Mark One)
[X]QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 1996.
OR
[ ]TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
Commission file number: 033-37802
CERES FUND, L.P.
_____________________________________
(State of incorporation) - Tennessee
(I.R.S. Employer Identification No.) - 62-1444129
889 Ridge Lake Blvd., Memphis, Tennessee 38120
(901)543-8076
_________________________________________
(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.
Yes ( X ) No ( )
CERES FUND, L.P.
(A Tennessee Limited Partnership)
Statement of Financial Condition
June 30, 1996
(UNAUDITED)
Assets Assets
June 30, 1996 December 31, 1995
Cash $ 36,210 $ 15,538
U. S. Treasury obligations at
cost plus accrued interest 2,388,210 2,288,186
Equity in
commodity trading account:
Cash 1,917,493 662,426
Unrealized gain <loss> of
open futures contracts 210,485 232,026
Market Value of open option
contracts <102,500> 1,840
Other assets 9,106 5,056
__________ __________
$ 4,459,004 $ 3,205,072
============ ===========
Liabilities and Partners' Capital
Liabilities:
Accrued management fees $ 13,828 $ 10,077
Accrued incentive fees 243,321 97,960
Other accrued expenses 22,788 15,489
Redemptions payable 68,483 83,926
__________ _________
348,420 207,452
__________ _________
Partners' capital:
General partners 309,104 166,392
Limited partners 3,801,480 2,831,228
__________ _________
Total partners' capital 4,110,584 2,997,620
__________ _________
$ 4,459,004 $ 3,205,072
============ ===========
See accompanying notes to financial statements.
CERES FUND, L.P.
(A Tennessee Limited Partnership)
Statement of Income
For the period from January 1, 1996
through June 30, 1996
(UNAUDITED)
Income
Net gains <losses> on trading of commodity
futures and option contracts:
Realized gain <losses> on closed positions $2,294,187
Change in unrealized gain <losses> on
open positions 1,970
Interest 79,548
__________
$2,375,705
__________
Expenses
Brokerage commissions, exchange, clearing fees
and NFA charges 251,388
Management fee allocations 66,264
Incentive fee allocations 277,618
Professional and administrative expenses 35,544
_________
630,814
_________
Net Income $1,744,891
=========
See accompanying notes to financial statements.
CERES FUND, L.P.
(A Tennessee Limited Partnership)
Statement of Income
For the period from January 1, 1995
through June 30, 1995
(UNAUDITED)
Income
Net gains <losses> on trading of commodity
futures and option contracts:
Realized gain <losses> on closed positions $ 480,529
Change in unrealized gain <losses>
on open positions 98,936
Interest 50,871
_________
630,336
_________
Expenses
Brokerage commissions, exchange, clearing fees
and NFA charges 180,806
Management fee allocations 36,705
Incentive fee allocations 5,997
Professional and administrative expenses 19,193
________
242,701
________
Net Income $ 387,635
=========
See accompanying notes to financial statements.
CERES FUND, L.P.
(A Tennessee Limited Partnership)
Statement of Income
For the period from April 1, 1996
through June 30, 1996
(UNAUDITED)
Income
Net gains <losses> on trading of commodity
futures and option contracts:
Realized gain <losses> on closed positions $1,859,287
Change in unrealized gain <losses> on
open positions 92,681
Interest 46,918
__________
$1,998,886
__________
Expenses
Brokerage commissions, exchange, clearing fees
and NFA charges 160,852
Management fee allocations 39,630
Incentive fee allocations 243,321
Professional and administrative expenses 21,329
__________
$ 465,132
__________
Net Income $1,533,754
==========
See accompanying notes to financial statements.
CERES FUND, L.P.
(A Tennessee Limited Partnership)
Statement of Income
For the period from April 1, 1995
through June 30, 1995
(UNAUDITED)
Income
Net gains <losses> on trading of commodity
futures and option contracts:
Realized gain <losses> on closed positions $ 444,126
Change in unrealized gain <losses> on
open positions 206,653
Interest 26,370
__________
$ 677,149
__________
Expenses
Brokerage commissions, exchange, clearing fees
and NFA charges 99,831
Management fee allocations 19,241
Incentive fee allocations 5,997
Professional and administrative expenses 10,063
__________
$ 135,132
__________
Net Income $ 542,017
==========
See accompanying notes to financial statements.
CERES FUND, L.P.
(A Tennessee Limited Partnership)
Statement of Cash Flows
(UNAUDITED)
Cash flows from operating activities:
YEAR TO DATE
Six Months Ended June 30, 1996
Net Income $ 1,744,891
Adjustments to reconcile net income
<loss> to net cash provided by
operating activities:
Net unrealized gain <losses> on open contracts 1,970
(Increase) decrease in operating assets:
U. S. Treasury obligation - 100,024
Investments in commodities fund -1,255,067
Unrealized gain <losses> on open futures and
options contracts 19,571
Market Value of open option contracts 104,340
Other Assets - 4,050
Increase (decrease) in operating liabilities:
Accrued management fees 3,751
Accrued incentive fees 145,361
Other accrued expenses 7,299
Amounts received for future subscriptions --
Redemptions payable - 15,443
Total Adjustments -1,092,292
Net Cash from operating activities 652,599
Cash Flows from Financing Activities:
Net proceeds from sale of limited partnership units --
Redemption of limited partnership units - 343,420
Distribution to limited partners - 288,507
Contributions received from general partners --
Net increase in cash 20,672
Cash at the beginning of the year 15,538
Cash at the end of the quarter 36,210
CERES FUND, L.P.
(A Tennessee Limited Partnership)
Statement of Cash Flows
(UNAUDITED)
Cash flows from operating activities:
YEAR TO DATE
Six Months Ended June 30, 1995
Net Income $ 387,635
Adjustments to reconcile net Income (Loss>
to net cash provided by operating activities:
Net unrealized gain <losses> on open contracts 98,936
(Increase) decrease in operating assets:
U. S. Treasury obligation - 247,903
Investments in commodities fund - 177,905
Unrealized gain <losses> on open futures and
options contracts - 197,872
Market Value of open option contracts - 11,250
Other Assets - 37
Increase (decrease) in operating liabilities:
Accrued management fees 1,726
Accrued incentive fees 5,997
Other accrued expenses - 12,333
Redemptions payable 294,256
Total Adjustments - 246,385
Net Cash used in operating activities 141,250
Cash Flows from Financing Activities:
Net proceeds from sale of limited partnership units 191,647
Redemption of limited partnership units - 345,171
Contributions received from general partners --
Net decrease in cash - 12,274
Cash at the beginning of the year 18,064
Cash at the end of the quarter 5,790
CERES FUND, L.P.
(A Tennessee Limited Partnership)
Notes to Financial Statements
June 30,1996
(1) Summary of Significant Accounting Policies
Organization
Ceres Fund, L.P. (the Partnership) is a Tennessee limited
partnership organized on September 19, 1990 to engage in the
speculative trading of commodities futures contracts and other
commodity interests. Randell Commodity Corporation ("Randell") and
RanDelta Capital Partners, L.P. ("RanDelta") are the general
partners. Randell serves as the managing general partner and
RanDelta serves as the financial general partner. Randell will
act as commodity trading advisor with respect to the Partnership.
The Partnership solicited subscriptions for a maximum of 100,000
units of limited partnership interest at $105 per unit. During the
initial offering period 13,471.6805 units were sold and the
Partnership commenced trading commodity futures contracts on
December 1, 1991. The Partnership continues to sell units as of
the end of each month at the then average net asset value per unit
plus a selling commission of 5% in accordance with the terms of the
Limited Partnership Agreement, and can continue selling units until
the maximum number of units offered have been sold. At June 30,
1996, a total of 43,547.7090 units have been sold with 25,587.3163
redeemed, leaving an outstanding balance at June 30, 1996, of
17,960.3927 units.
The general partners agreed to make a capital contribution of the
lesser of $100,000 or 3% of total partnership capitalization and
made an initial capital contribution of $45,000 and has made
additional capital contributions during the period of $55,000 to
meet its investment commitment in the Partnership. In no event will
the general partners' interest in the Partnership be less than 1%
of total partnership capitalization.
Income and expenses of the Partnership (excluding the Management
Allocation and Incentive Allocation) will be allocated pro rata
among the partners based on their respective capital accounts as of
the beginning of the month in which the items of income and expense
accrue, except that limited partners have no liability for
partnership obligations in excess of his or her capital account,
including earnings. The Management Allocation and Incentive
Allocation are allocated to the Limited Partners only in accordance
with the terms of the Limited Partnership Agreement.
The Partnership is not liable for any organizational and offering
expenses in connection with the issuance and distribution of the
units. Refco, Inc., the Partnership's commodity broker, paid the
organizational expenses of the Partnership and the expenses of
offering the units to the public. The Partnership will not
reimburse Refco, Inc. for any portion of the costs so incurred and
will not be liable for any such costs at any time.
Units may not be redeemed during the first six months after they
are purchased. Thereafter, limited partners may redeem their units
at the redemption net asset value per unit as of the end of any
calendar quarter upon ten days written notice to the managing
general partner. The redemption charge will be based on the
redemption net asset value on all units redeemed as more fully
described in the offering prospectus.
Under the terms of the partnership agreement, the Partnership will
terminate on the earlier of December 31, 2020, or the occurrence of
certain events as more fully described in the Limited Partnership
Agreement.
Valuation of Futures Contracts
Open commodity futures contracts are valued at market daily and
unrealized gains and losses are reflected in income.
Income Taxes
No provision for income taxes has been made in the accompanying
financial statements since, as a partnership, income and losses for
tax purposes are allocated to the partners for inclusion in their
respective tax returns.
(2) Management Agreement
The Partnership has entered into a Management Agreement in
consideration of and as compensation for the services to be
rendered by the General Partners and trading advisors. The
Partnership will pay to the general partners a monthly Management
Allocation equal to 1/3 of 1% (4% per annum) of the adjusted net
asset value of units at month end, plus a quarterly Incentive
Allocation of 15% of any net new appreciation in the adjusted net
asset value of units for the quarter. During the six months ended
June 30, 1996, management fees totalled $66,264 and incentive fees
totalled $277,618.
(3) Customer Agreement with Refco, Inc.
The Partnership entered into a customer agreement with Refco, Inc.
(Refco), pursuant to which the Partnership deposits its assets in
a commodity trading account with Refco who executes trades on
behalf of the Partnership. The Partnership agrees to pay such
brokerage and commission charges and fees as Refco may establish
and charge from time to time. During 1996, Refco charged the
Partnership commissions on commodity trades at the rate of $32.50
per round-turn. Total commissions charged to the Partnership by
Refco during this six month period were $240,924. The Partnership
earns interest on 80% of the average daily equity maintained as
cash in the Partnership's trading account at a rate equal to the
average yield on 13-week United States Treasury Bills. Total
interest earned by the Partnership from this source during this six
month period amounted to $77,548.
(4) Related Parties
The sole shareholder of the parent of the managing General Partner
is an active partner in the law firm which is the counsel to the
Partnership, the General Partners, the Memphis branch of Refco and
the Partnership's commodity broker.
(5) Distribution to Limited Partners.
On January 15, 1996, the General Partner declared a distribution to
the limited partners equal to the difference between the December
31, 1995, net asset value per unit and $125 per unit. This
distribution, totaling $288,507 resulted in each unit holder having
a net asset value of $125 per unit on January 1, 1996.
CERES FUND, L.P.
(A Tennessee Limited Partnership)
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
for the Quarter Ended June 30, 1996.
RESULTS OF OPERATIONS
Six Months Ending June 30, 1996
Trading in April 1996 resulted in an increase in net asset
value of approximately 50.5% resulting in net income (including
fees and expenses) of $1,337,657 principally in grains.
Trading in May 1996 resulted in an increase in net asset value
of approximately 8.7% resulting in net income (including fees and
expenses) of $348,380, principally in grains.
Trading in June 1996 resulted in a decrease in net asset value
of approximately 4.0% resulting in net losses (including fees and
expenses) of $152,283 principally in grains.
CAPITAL RESOURCES
The Partnership does not intend to raise any additional
capital through borrowing, but will continue to sell Units at the
average net asset value of Units as of the end of each calendar
month. Due to the nature of the Partnership's business, it will
make no significant capital expenditures, and substantially all its
assets are and will be represented by cash, United States Treasury
bills, securities purchased under agreement to resell and commodity
futures investments. Inflation is not a significant factor in the
Partnership's profitability.
Commission File No. 033-37802
CERES FUND, L.P.
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
The accompanying interim consolidated financial statements are
unaudited, but include all adjustments which management considers
necessary for the fair presentation of results at June 30, 1996.
Moreover, these financial statements do not purport to contain
complete disclosures in conformity with generally accepted
accounting principles and should be read in conjunction with the
Registrant's audited consolidated financial statements at and for
the period ended December 31, 1995.
The results reflected for the six month period ended June 30, 1996
and the period ended December 31, 1995, are not necessarily
indicative of the results for the entire fiscal year which will end
December 31, 1996.
PART II - OTHER INFORMATION
Item 1. Legal Proceedings.
None.
Item 2. Changes in Securities.
None.
Item 3. Defaults Upon Senior Securities.
None.
Item 4. Submission of Matters to a Vote of Security Holders.
None.
Item 5. Other Information.
A. The registration statement became effective on March 9, 1991
at which time the Partnership began offering the securities
for sale. The offering was extended for 60 days and sales
of 13,471.6805 Units for $1,413,296.45 were consummated by
November 30, 1991 at which time the initial offering period
ended and the continuous offering period commenced. The
Partnership commenced operations December 1, 1991. The
Partnership continues to offer Units for sale. During the
period of January 1, 1996 through June 30, 1996, no
additional Units were sold and 324.5294 Units were
redeemed.
B. The Units were offered by the Partnership through members of
the National Association of Securities Dealers, Inc. on a
best efforts basis.
C. These securities were registered under the Securities Act of
1933.
D. (1) Units of Limited Partnership interest outstanding at
April 30, 1996 - 18,284.9221.
(2) Units of Limited Partnership interest outstanding at
May 31, 1996 - 18,284.9221.
(3) Units of Limited Partnership interest outstanding at
June 30, 1996 - 17,960.3927.
E. Issuance of Limited Partnership Units for cash in the
following amounts and on the following dates:
Dates Units Amount
April 1, 1996 -- --
May 1, 1996 -- --
June 1, 1996 -- --
F. Redemption of Limited Partnership Units for cash in the
following amounts and on the following dates:
Dates Units Amount
June 30, 1996 324.5294 $ 68,483
G. On May 9, 1994, transactions were consulated pursuant to
which Delta International, Inc. terminated its services as
trading advisor to the Fund and withdrew as the co-general
partner of RanDelta Capital Partners, L.P., the financial
general partner to the Fund effective March 31, 1994.
These transactions were affected without any cost or
expense to the Fund.
Item 6. Exhibits and Reports on Form 8-K.
None.
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 of the undersigned thereunto duly authorized.
Date: August 13, 1996
CERES FUND, L.P.
By: Randell Commodity Corporation
Managing General Partner
By: /s/ Frank L. Watson, Jr.
__________________________
Frank L. Watson, Jr.
Chairman