UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM10-Q

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

OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended SeptemberJune 30, 20172019

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 Number000-52602

CERES TACTICAL COMMODITY L.P.

(Exact name of registrant as specified in its charter)

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)

Securities registered pursuant to Section 12(b) of the Act:

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 RegulationS-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.

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 OctoberJuly 31, 2017, 63,033.20872019, 75,958.5947 Limited Partnership Class A Redeemable Units were outstanding, 600.0580 Limited Partnership Class D Redeemable Units were outstanding and 0.000099.2020 Limited Partnership Class Z Redeemable Units were outstanding.

PART I. FINANCIAL INFORMATION

Item 1.Financial Statements.

Ceres Tactical Commodity L.P.

Statements of Financial Condition

⁽¹⁾

See accompanying notes to financial statements.

1

Ceres Tactical Commodity L.P.

Condensed Schedule of Investments

June 30, 2019

(Unaudited)

See accompanying notes to financial statements.

2

Ceres Tactical Commodity L.P.

Condensed Schedule of Investments

December 31, 2018

See accompanying notes to financial statements.

3

Ceres Tactical Commodity L.P.

Statements of Income and Expenses

(Unaudited)

*

See accompanying notes to financial statements.

24

Ceres Tactical Commodity L.P.

Statements of Changes in Partners’ Capital

For the NineThree and Six Months Ended SeptemberJune 30, 20172019 and 20162018

(Unaudited)

See accompanying notes to financial statements.

35

Ceres Tactical Commodity L.P.

Notes to Financial Statements

(Unaudited)

Ceres Tactical Commodity L.P. (formerly, Managed Futures Premier Aventis II L.P.) (the “Partnership”) is a limited partnership organized on April 20, 2005 under the partnership laws of the State of New York to engage, directly orand indirectly, in the speculative trading of commodity interests on U.S. and international futures, options on futures and forward markets. The Partnership may also engage, directly or indirectly, in swap transactions and other derivative transactions with the approval of the General Partner (as defined below). Initially, the Partnership’s investment strategy focused on energy and energy-related investments. While the Partnership is expected to continue to have significant exposure to energy and energy-related markets, such trading will no longer be the Partnership’s primary focus. Therefore, the Partnership’s past trading performance will not necessarily be indicative of future results. The sectors traded include energy, grains, livestock, metals and softs. The commodity interests that are traded by the Partnership, directly or indirectly through its investment in MB Master Fund L.P. (the “Master”),the Funds (as defined below) are volatile and involve a high degree of market risk. The General Partner may also determine to invest up to all of the Partnership’s assets (directly or indirectly through its investment in the Master)Funds) 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. During the initial offering period, the Partnership sold 11,925 redeemable units of limited partnership interest in the Partnership (“Redeemable Units”). The Partnership commenced trading on September 6, 2005. The Partnership privately and continuously offers Redeemable Units to qualified investors. There is no maximum number of Redeemable Units that may be sold by the Partnership.

Ceres Managed Futures LLC, a Delaware limited liability company, acts as the general partner (the “General Partner”) and commodity pool operator of the Partnership. AsPartnership and is the trading manager (the “Trading Manager”) of January 1, 2017, theNL Master (as defined below) and Aquantum Master (as defined below). The General Partner becamewas also the Trading Manager of Harbour Square Master (as defined below). The General Partner is a wholly ownedwholly-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. Prior to January 1, 2017, the General Partner was a wholly owned subsidiary

As of Morgan Stanley Smith Barney Holdings LLC. AllJune 30, 2019, all trading decisions are made for the Partnership are made by Millburn Ridgefield Corporation (“Millburn”), Ospraie Management, LLC (“Ospraie”), Aquantum GmbH (“Aquantum”), Pan Capital Management L.P. (“Pan”), and Northlander Commodity Advisors LLP (“Northlander”) (each, an “Advisor” and, collectively, the “Advisors”), each, a registered commodity trading advisor. On November 30, 2018, the Partnership fully redeemed its investment in MB Master Fund L.P. (“MB Master”). Also effective November 30, 2018, Aventis Asset Management, LLC (“Aventis” or) ceased to act as a commodity trading advisor to the “Advisor”).

DuringPartnership. On March 31, 2019, the reporting periods ended September 30, 2017 and 2016, the Partnership’s and the Master’s commodity broker was Morgan Stanley & Co.Partnership fully redeemed its investment in CMF Harbour Square Master Fund LLC (“MS&Co.”Harbour Square Master”),. Also effective March 31, 2019, Harbour Square Capital Management LLC (“Harbour Square”) ceased to act as a registered futures commission merchant. The Partnership andcommodity trading advisor to the Master also depositPartnership. Each Advisor is allocated a portion of their cash in non-trading accounts at JPMorgan Chase Bank, N.A.

Effective February 28, 2017, the Partnership’s assets to manage. The Partnership changed its name from Managed Futures Premier Aventis II L.P. to Ceres Tactical Commodity L.P.

On February 1, 2013,invests the Partnership allocated substantially allportion of its capitalassets allocated to each of the Advisors either directly, through individually managed accounts, or indirectly through its investment in the Funds. References herein to the Master, a limited partnership organized under“Advisors” may also include, as relevant, Harbour Square and Aventis. The Advisors are not affiliated with one another, are not affiliated with the partnership laws of the State of Delaware. The Master permits accounts managed by Aventis using its Aventis Diversified Commodity Strategy, a proprietary, discretionary trading system, to invest together in one trading vehicle. The General Partner is also the general partner of the Master. Individual and pooled accounts currently managed by the Advisor, including the Partnership, are permitted to be limited partners of the Master. The General Partner and MS&Co. and are not responsible for the Advisor believe that trading through this master/feeder structure should promote efficiency and economy in the trading process. Expenses to investors as a resultorganization or operation of the investment in the Master are approximately the same as if the Partnership traded directly and redemption rights are not affected.

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

The General Partner is not aware of any material changes to the Aventis Diversified Commodity Strategy during the fiscal quarter ended September 30, 2017.

4

Ceres Tactical Commodity L.P.

Notes to Financial Statements

(Unaudited)Partnership.

As of November 11, 2016,June 13, 2018, the Partnership began offering twothree classes of limited partnership interests, Class A Redeemable Units, Class D Redeemable Units and Class Z Redeemable Units. All Redeemable Units issued prior to October 31, 2016 were deemed “Class A Redeemable Units.” Class Z Redeemable Units were first issued on January 1, 2017. The rights, liabilities, risks and fees associated with investment in the Class A Redeemable Units were not changed. Class D Redeemable Units were first issued on July 1, 2018. The rights, liabilities, risks and fees associated with investment in the Class A Redeemable Units and Class Z Redeemable Units were not changed. Class A Redeemable Units, Class D Redeemable Units and Class Z Redeemable Units will each be referred to as a “Class” and collectively referred to as the “Classes.” The rights, liabilities, risks, and fees associated with investment in the Class A Redeemable Units were not changed.and Class AD Redeemable Units are available to taxable U.S. individuals and institutions, U.S. tax exempt individuals and institutions andnon-U.S. investors. Class Z Redeemable Units are offered to limited partners who receive advisory services from Morgan Stanley Smith Barney LLC (doing business as Morgan Stanley Wealth Management) (“Morgan Stanley Wealth Management”) and may also be offered to certain employees of Morgan Stanley and/or its subsidiaries (and their family members). Class A Redeemable Units, Class D Redeemable Units and Class Z Redeemable Units are identical, except that Class A Redeemable Units are subject to a monthly ongoing selling agent fee equal to 1/12 of 2.00% (a 2.00% annual rate) of the net assets of Class A as of the end of each month, which differs from the Class D Redeemable Units monthly ongoing selling agent fee of 1/12 of 0.75% (a 0.75% annual rate) of the net assets of Class D as of the end of each month. Class Z Redeemable Units are not subject to a monthly ongoing selling agent fee. Class Z Redeemable Units were first issued on January 1, 2017.

At September

6

Ceres Tactical Commodity L.P.

Notes to Financial Statements

(Unaudited)

During the reporting periods ended June 30, 2017,2019 and 2018, the Partnership owned approximately 88.3%Partnership’s/Funds’ commodity broker was Morgan Stanley & Co. LLC (“MS&Co.”), a registered futures commission merchant. During prior periods included in this report, the Partnership/Funds deposited a portion of the Master. At December 31, 2016, the Partnership owned approximately 88.1% of the Master. It istheir cash innon-trading bank accounts at JPMorgan Chase Bank, N.A.

Millburn, Ospraie and Pan directly trade the Partnership’s intentionassets allocated to continue to invest substantially all of its assetseach Advisor through managed accounts in the Master. The performancename of the Partnership is directly affected by the performance of the Master.

The Master’s trading of futures, forward, swappursuant to Millburn’s Commodity Program, Ospraie’s Commodity Program and option contracts, if applicable, on commodities is done primarily on U.S. commodity exchanges and foreign commodity exchanges. The Master engages in such trading through a commodity brokerage account maintained with MS&Co. The Master’s Statements of Financial Condition, Condensed Schedules of Investments and Statements of Income and Expenses and Changes in Partners’ Capital are included herein.Pan’s Energy Trading Program, respectively.

The Partnership, CMF NL Master Fund LLC (“NL Master”) and theCMF Aquantum Master Fund LLC (“Aquantum Master”) have entered, and (prior to their respective terminations) Harbour Square Master and MB Master had entered, into futures brokerage account agreements with MS&Co. NL Master and Aquantum Master are collectively referred to as the “Funds.” References herein to the Funds may also include, as relevant, Harbour Square Master and MB Master. The Partnership, directly and 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, the execution of transactions as well as exchange, user,give-up, floor brokerage and National Futures Association fees (collectively, the “clearing fees”).

The Partnership has also entered into a selling agreement (as amended, the “Selling Agreement”) with Morgan Stanley Wealth Management. Pursuant to the Selling Agreement,General Partner fees, management fees, incentive fees and professional fees of the Partnership pays Morgan Stanley Wealth Management a monthly ongoing selling agent fee equalare allocated proportionally to 2.00% per yeareach Class based on the net asset value of the Partnership’s adjusted month-end net assets of Class A Redeemable Units. The ongoing selling agent fee received by Morgan Stanley Wealth Management is shared with the properly registered or exempted financial advisors of Morgan Stanley Wealth Management who have sold Class A Redeemable Units in the Partnership. Class Z Redeemable Units are not subject to a monthly ongoing selling agent fee.each Class.

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. The cost of retaining the Administrator is allocated among the pools operated by the General Partner, including the Partnership.

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 SeptemberJune 30, 2017,2019 and the results of its operations for the three and nine months ended September 30, 2017 and 2016 and changes in partners’ capital for the ninethree and six months ended SeptemberJune 30, 20172019 and 2016.2018. These financial statements present the results forof 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 filed with the Securities and Exchange Commission (the “SEC”) for the year ended December 31, 2016.2018. The December 31, 20162018 information has been derived from the audited financial statements as of and for the year ended December 31, 2016.2018.

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.

5

Ceres Tactical Commodity L.P.

Notes to Financial Statements

(Unaudited)

Profit AllocationAllocation.. 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 contributioncontributions and profits, if any, net of distributions or 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 SeptemberJune 30, 20172019 and 2016,2018, the Partnership carried no debt and substantially all of the Partnership’s and the Funds’ investments were carried at fair value and classified as Level 1 and Level 2 measurements.

7

Ceres Tactical Commodity L.P.

Notes to Financial Statements

(Unaudited)

Partnership’s Investment.Investment in the Funds.The Partnership carries its investment in the MasterFunds based on the Partnership’s (1) net contribution to the MasterFunds and (2) its allocated share of the undistributed profits and losses, including realized gains or losses and net change in unrealized gains or losses, of the Master. The valuation of the Master’s investments, including the classification within the fair value hierarchy of the investmentsFunds.

Partnership’s/Funds’ Derivative Investments. All commodity interests held by the Master, are described in Note 5, “Fair Value Measurements.”

Master’s Investments.All commodity interests of the Master,Partnership/Funds, including derivative financial instruments and derivative commodity instruments, are held for trading purposes. The commodity interests are recorded on the trade date and open contracts are recorded at fair value (as described in Note 5, “Fair Value Measurements”) at the measurement date. Investments in commodity 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 and are determined using thefirst-in,first-out method. UnrealizedNet unrealized gains or losses on open contracts are included as a component of equity in trading account in the Master’sPartnership’s/Funds’ Statements of Financial Condition. Net realized gains or losses and net change in unrealized gains or losses are included in the Master’sPartnership’s/Funds’ Statements of Income and Expenses and Changes in Partners’ Capital. Expenses.

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

Master’sPartnership’s Cash. The Master’sPartnership’s restricted cash is equal to the cash portion of assets on deposit to meet margin requirements, as determined by the exchange or counterparty, and required by MS&Co. At June 30, 2019 and December 31, 2018, the amount of cash held for margin requirements was $5,416,200 and $7,608,136, respectively. Cash that is not classified as restricted cash is therefore classified as unrestricted cash. The Partnership’s restricted and unrestricted cash includes cash denominated in foreign currencies of $(361,446)$36,605 (cost of $36,626) and ($142,547) (proceeds of $355,564) and $(215,708) (proceeds of $220,034)$141,947) as of SeptemberJune 30, 20172019 and December 31, 2016,2018, 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”“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 20132015 through 20162018 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 RequirementsRequirements”” 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)(Loss) per Redeemable Unit. Net income (loss) per Redeemable Unit for each Class 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, 2016.

Ceres Tactical Commodity L.P.

Notes to Financial Statements

(Unaudited)

The Master’s Statements of Financial Condition and Condensed Schedules of Investments as of September 30, 2017 and December 31, 2016 and Statements of Income and Expenses and Changes in Partners’ Capital for the three and nine months ended September 30, 2017 and 2016 are presented below.

MB Master Fund L.P.

Statements of Financial Condition