1
FORM 10-Q

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 1998.

[ ] 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)577-2229
-----------------------------------------
(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.

CONTENTS

PART I. Financial Information

ITEM 1. Financial Statements (unaudited)

Statements of Financial Condition
June 30, 1998, and December 31, 1997

Statements of Operations
Three and Six Months Ended June 30, 1998 and 1997

Statements of Cash Flows
Six Months Ended June 30, 1998 and 1997

Notes to Financial Statements

ITEM 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations

PART II. Other Information

FORWARD-LOOKING STATEMENTS

Statements contained in this Report, which are not historical in
nature, are forward-looking statements within the meaning of the Private
Securities Litigation Reform Act of 1995. These forward-looking statements
include statements in the "Management's Discussion and Analysis of Financial
Conditional and Results of Operations" regarding liquidity and capital
resources. Such forward-looking statements involve certain risks and
uncertainties that could cause actual results to differ materially from
anticipated results. These risks and uncertainties include regulatory
constraints, competition from other companies, changes in the Partnership's
operation or expansion strategy, the general economy of the United States and
the specific markets in which the Company operates and other factors as may be
identified from time to time in the Partnership's filings with the Securities
and Exchange Commission or in the Partnership's press releases.

CERES FUND, L.P.

PART I - FINANCIAL INFORMATION

Item 1. Financial Statements

The accompanying interim financial statements have been prepared in accordance
with the accounting policies in effect as of December 31, 1997, as set forth in
the annual financial statements of Ceres Fund, L.P. as of such date. In the
opinion of management, all adjustments necessary for a fair presentation of the
consolidated condensed financial statements have been included and all such
adjustments were of a normal recurring nature. The results of operations for the
six-month period ended June 30, 1998 are not necessarily indicative of the
results to be expected for the full year.

CERES FUND, L.P.
(A Tennessee Limited Partnership)

Statements of Financial Condition

June 30, 1998 and December 31, 1997
(Unaudited)

Assets:
June 30, 1998 December 31, 1997
------------- -----------------

Cash $ 215,768 $ 155,155
U. S. Treasury obligations at
cost plus accrued interest 6,954,206 6,308,524
Equity in commodity trading account:
Cash 802,186 141,589
Unrealized gain (loss) on
open futures contracts (624,723) 27,202
Market value of open option
contracts (12,938) 10,780
Other assets 3,903 4,395
----------- ----------
$ 7,338,402 $6,647,645
=========== ==========

Liabilities and Partners' Capital

Liabilities:
Accrued management fees $ 23,076 $ 20,855
Accrued incentive fees -- 1,662
Other accrued expenses 39,181 60,387
Amounts received
for future subscriptions 6 --
Redemptions payable 54,527 80,700
----------- ----------
116,790 163,604
----------- ----------
Partners' capital:
General partners 376,530 357,891
Limited partners 6,845,082 6,126,150
----------- ----------
Total partners' capital 7,221,612 6,484,041
----------- ----------
$ 7,338,402 $6,647,645
=========== ==========

See accompanying notes to financial statements

CERES FUND, L.P.
(A Tennessee Limited Partnership)

Statements of Operations
(Unaudited)
Six Months Ended June 30, Three Months Ended June 30,
1998 1997 1998 1997
----------- --------- --------- ---------

Income

Net gains (losses) on trading
of commodity futures and
option contracts:
Realized gain (losses) on closed
positions $ 1,271,320 $ 352,471 $ 717,148 $(431,221)

Change in unrealized losses on
open positions (618,305) (782,424) (825,881) (94,506)
Interest 176,418 136,624 93,287 77,126
----------- --------- --------- ---------

Income (Loss) From Operations $ 829,433 $(293,329) $ (15,446) $(448,601)
----------- --------- --------- ---------

Expenses
Brokerage commissions, exchange,
clearing fees and NFA charges 449,289 536,440 256,237 339,022
Management fee allocations 135,824 104,363 71,472 57,445
Incentive fee allocations 13,932 -- -- --
Professional and administrative
expenses 36,000 52,403 18,000 27,026
----------- --------- --------- ---------
635,045 693,206 345,709 423,493
----------- --------- --------- ---------

Net Income (Loss) $ 194,388 $(986,535) $(361,155) $(872,094)
=========== ========= ========= =========

Aggregate Income (Loss)
Allocated to General Partners $ 18,639 $ (50,360) $ (14,723) $ (46,004)

Aggregate Income (Loss)
Allocated to Limited Partners $ 175,749 $(936,175) $(346,432) $(826,090)

Net Income (Loss) per Limited
Partnership Unit (Average) $ 5.30 $ (39.28) $ (10.26) $ (30.72)

See accompanying notes to financial statements.

CERES FUND, L.P.
(A Tennessee Limited Partnership)
Statements of Cash Flows
(Unaudited)

Six Months Ended June 30,
1998 1997
----------- -----------

Cash flows from operating activities:
Net Income (Loss) $ 194,388 $ (986,535)

Adjustments to reconcile net Income (Loss)
to net cash provided by operating activities:

Net unrealized loss on open contracts (618,305) (782,424)

(Increase) decrease in operating assets:

U. S. Treasury obligations (645,882) (2,985,270)
Investments in commodities fund (660,597) 862,065
Unrealized gain (loss) on open futures and
options contracts 1,270,230 1,572,524
Market value of open option contracts 23,718 482,050
Other Assets 492 5,106

Increase (decrease) in operating liabilities:

Accrued management fees 2,221 8,019
Accrued incentive fees (1,662) (32,849)
Other accrued expenses (21,206) 27,465
Amounts received for future subscriptions 6 562
Redemptions payable 26,173 40,159
----------- -----------
Total Adjustments (676,958) (802,593)
----------- -----------

Net Cash used in operating activities (482,570) (1,789,128)

Cash Flows from financing activities:

Net proceeds from sale of limited partnership units 722,559 2,278,063
Redemption of limited partnership units (179,376) (202,260)
Distribution to limited partners -- (244,228)

Net increase in cash 60,613 42,447
Cash at the beginning of the year 155,155 108,554
----------- -----------
Cash at the end of the quarter $ 215,768 $ 151,001
=========== ===========

See accompanying notes to financial statements.

CERES FUND, L.P.
(A Tennessee Limited Partnership)

Notes to Financial Statements

June 30, 1998

(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 4% 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, 1998, a total of 61,094.1177 units
have been sold, 1,861.9400 units have been distributed in lieu of a cash
distribution, and 28,437.8416 units have been redeemed, leaving an outstanding
balance at June 30, 1998, of 34,518.2161 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, 1998, management fees totaled
$135,824 and incentive fees totaled $13,932.

(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 1998, 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 $430,252. 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 $176,418.

(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 16, 1997, the General Partner declared a distribution to the limited
partners equal to the difference between the December 31, 1996 net asset value
per unit and $210 per unit. This distribution, totaling $244,228 in cash and
1,861.94 in units, resulted in each unit holder having a net asset value of $210
per unit on January 1, 1997.

(6) Calculation of Net Income (Loss) per Limited Partnership Unit

The Net Income (Loss) per Limited Partnership Unit for the period from January
1, 1998 through June 30, 1998 of $5.30 was calculated by dividing the Aggregate
Income (Loss) Allocated to Limited Partners of $175,749 by the Average Units
outstanding between December 31, 1997 and June 30, 1998 (33,157.7667 Units).

The Net Income (Loss) per Limited Partnership Unit for the period from January
1, 1997 through June 30, 1997 of $(39.28) was calculated by dividing the
Aggregate Income (Loss) Allocated to Limited Partners of $(936,175) by the
Average Units outstanding between December 31, 1996 and June 30, 1997
(23,830.6668 Units).

The Net Income (Loss) per Limited Partnership Unit for the period from April 1,
1998 through June 30, 1998 of $(10.26) was calculated by dividing the Aggregate
Income (Loss) Allocated to Limited Partners of $(346,432) by the Average Units
outstanding between March 31, 1998 and June 30, 1998 (33,751.7810 Units).

The Net Income (Loss) per Limited Partnership Unit for the period from April 1,
1997 through June 30, 1997 of $(30.72) was calculated by dividing the Aggregate
Income (Loss) Allocated to Limited Partners of $(826,090) by the Average Units
outstanding between March 31, 1997 and June 30, 1997 (26,891.0692 Units).

(7) Recent Pronouncements

In June 1997, SFAS No. 131, "Disclosures About Segments of an Enterprise and
Related Information" was issued. This statement requires that a public business
enterprise report financial and descriptive information about its reportable
operating segments. Operating segments are components of an enterprise about
which separate financial information is available that is evaluated regularly by
the chief operating decision maker in deciding how to allocate resources and in
assessing performance. This statement is effective for fiscal years beginning
after December 15, 1997. The Partnership intends to comply with this statement
in 1998.

In June 1998, SFAS No. 133, "Accounting for Derivative instruments and Hedging
Activities" was issued. This statement establishes accounting and reporting
standards for derivative instruments, including certain derivative instruments
embedded in other contracts, and for hedging activities. This statement is
effective for all fiscal quarters of fiscal years beginning after June 15, 1999.
The partnership intends to comply with this statement in 2000.

CERES FUND, L.P.
(A Tennessee Limited Partnership)

MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS

RESULTS OF OPERATIONS

The Three and Six Months ended June 30, 1998, compared to the Three and Six
Months Ended June 30, 1997.

Trading losses decreased during the three months ended June 30, 1998, as
compared to the same period in 1997. The Partnership had a loss from trading
activities of $15,446 for the three months ended June 30, 1998, as compared to a
loss from trading activities of $448,601 for the three months ended June 30,
1997. The losses during this period are primarily attributable to losses in
connection with the trading of grain contracts. As a result of such losses from
trading activities, the Partnership had a net loss of $361,155 for the three
months ended June 30, 1998, compared to a net loss of $872,094 for the same
period in 1997; and a net loss per limited partnership Unit of $10.26 for the
three months ended June 30, 1998, compared to a net loss per limited partnership
Unit of $30.72 for the same period in 1997.

Trading results were profitable during the six months ended June 30, 1998, as
compared to the same period in 1997. The Partnership had income from trading
activities of $829,433 for the six months ended June 30, 1998, compared to a
loss from trading activities of $293,329 for the six months ended June 30, 1997.
The gains during this period were primarily attributable to gains in connection
with the trading of grain contracts. As a result of such gains from trading
activities, the Partnership had a net gain of $194,388 for the six months ended
June 30, 1998, compared to a net loss of $986,535 for the same period in 1997,
and a net gain per limited partnership Unit of $5.30 for the six months ended
June 30, 1998, compared to a net loss per limited partnership Unit of $39.28 for
the same period in 1997.

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, 1998, through June 30, 1998, 3,599.5889
additional Units were sold and 878.6901 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, 1998 - 33,702.8832

(2) Units of Limited Partnership interest outstanding at

May 31, 1998 - 34,124.9308

(3) Units of Limited Partnership interest outstanding at

June 30, 1998 - 34,518.2161

E. Issuance of Limited Partnership Units for cash in the following amounts and
on the following dates:

Dates Units Amount

April 1, 1998 717.5374 $ 149,339
May 1, 1998 422.0476 $ 92,218
June 1, 1998 669.0029 $ 139,318

F. Redemption of Limited Partnership Units for cash in the following amounts and
on the following dates:

Dates Units Amount

June 30, 1998 275.7176 $ 54,527

Item 6. Exhibits and Reports on Form 8-K.

Exhibits
27 Financial Data Schedule (For SEC use only)

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 12, 1998

CERES FUND, L.P.
By: Randell Commodity Corporation
Managing General Partner

By: Frank L. Watson, Jr.

/s/ Frank L. Watson, Jr.
- ---------------------------
Frank L. Watson, Jr.
Chairman