Edgar Filing: Teucrium Commodity Trust

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 10-Q

	☒	Quarterly report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 for the quarterly period ended September 30, 2018.

	☐	Transition report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 for the transition period from to ..

Commission File Number: 001-34765

Teucrium Commodity Trust
(Exact name of registrant as specified in its charter)


Delaware	61-1604335
(State or other jurisdiction of	(I.R.S. Employer
incorporation or organization)	Identification No.)

115 Christina Landing Drive, Unit 2004
Wilmington, DE 19801
(Address of principal executive offices) (Zip code)

(302) 543-5977
(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 ☐ 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).

☒ Yes ☐ No

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, 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 Rule 12b-2 of the Exchange Act.


Large accelerated filer ☐	Accelerated filer ☒
Non-accelerated filer ☐	Smaller reporting company ☐
(Do not check if a smaller reporting company)	Emerging growth company ☐

If an emerging growth company, indicate by a 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 Rule 12b-2 of the Exchange Act).

☐ Yes ☒ No

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the last practicable date.

	Total Number of Outstanding Shares as of November 7, 2018
Teucrium Corn Fund	3,875,004
Teucrium Sugar Fund	1,625,004
Teucrium Soybean Fund	1,750,004
Teucrium Wheat Fund	9,350,004
Teucrium Agricultural Fund	75,002

TEUCRIUM COMMODITY TRUST

Table of Contents

	Page
Part I. FINANCIAL INFORMATION	3

Item 1. Financial Statements	3

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations	118

Item 3. Quantitative and Qualitative Disclosures About Market Risk	163

Item 4. Controls and Procedures	168

Part II. OTHER INFORMATION	169

Item 1. Legal Proceedings	169

Item 1A. Risk Factors	169

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds	187

Item 3. Defaults Upon Senior Securities	190

Item 4. Mine Safety Disclosures	190

Item 5. Other Information	190

Item 6. Exhibits	191

Part I. FINANCIAL INFORMATION

Item 1. Financial Statements.

Index to Financial Statements

Documents		Page
TEUCRIUM COMMODITY TRUST
Combined Statements of Assets and Liabilities at September 30, 2018 (Unaudited) and December 31, 2017		4
Combined Schedule of Investments at September 30, 2018 (Unaudited) and December 31, 2017		5
Combined Statements of Operations (Unaudited) for the three and nine months ended September 30, 2018 and 2017		7
Combined Statements of Changes in Net Assets (Unaudited) for the nine months ended September 30, 2018 and 2017		8
Combined Statements of Cash Flows (Unaudited) for the nine months ended September 30, 2018 and 2017		9
Notes to Combined Financial Statements		10
TEUCRIUM CORN FUND
Statements of Assets and Liabilities at September 30, 2018 (Unaudited) and December 31, 2017		26
Schedule of Investments at September 30, 2018 (Unaudited) and December 31, 2017		27
Statements of Operations (Unaudited) for the three and nine months ended September 30, 2018 and 2017		29
Statements of Changes in Net Assets (Unaudited) for the nine months ended September 30, 2018 and 2017		30
Statements of Cash Flows (Unaudited) for the nine months ended September 30, 2018 and 2017		31
Notes to Financial Statements		32
TEUCRIUM SOYBEAN FUND
Statements of Assets and Liabilities at September 30, 2018 (Unaudited) and December 31, 2017		45
Schedule of Investments at September 30, 2018 (Unaudited) and December 31, 2017		46
Statements of Operations (Unaudited) for the three and nine months ended September 30, 2018 and 2017		48
Statements of Changes in Net Assets (Unaudited) for the nine months ended September 30, 2018 and 2017		49
Statements of Cash Flows (Unaudited) for the nine months ended September 30, 2018 and 2017		50
Notes to Financial Statements		51
TEUCRIUM SUGAR FUND
Statements of Assets and Liabilities at September 30, 2018 (Unaudited) and December 31, 2017		64
Schedule of Investments at September 30, 2018 (Unaudited) and December 31, 2017		65
Statements of Operations (Unaudited) for the three and nine months ended September 30, 2018 and 2017		67
Statements of Changes in Net Assets (Unaudited) for the nine months ended September 30, 2018 and 2017		68
Statements of Cash Flows (Unaudited) for the nine months ended September 30, 2018 and 2017		69
Notes to Financial Statements		70
TEUCRIUM WHEAT FUND
Statements of Assets and Liabilities at September 30, 2018 (Unaudited) and December 31, 2017		83
Schedule of Investments at September 30, 2018 (Unaudited) and December 31, 2017		84
Statements of Operations (Unaudited) for the three and nine months ended September 30, 2018 and 2017		86
Statements of Changes in Net Assets (Unaudited) for the nine months ended September 30, 2018 and 2017		87
Statements of Cash Flows (Unaudited) for the nine months ended September 30, 2018 and 2017		88
Notes to Financial Statements		89
TEUCRIUM AGRICULTURAL FUND
Statements of Assets and Liabilities at September 30, 2018 (Unaudited) and December 31, 2017		103
Schedule of Investments at September 30, 2018 (Unaudited) and December 31, 2017		104
Statements of Operations (Unaudited) for the three and nine months ended September 30, 2018 and 2017		106
Statements of Changes in Net Assets (Unaudited) for the nine months ended September 30, 2018 and 2017		107
Statements of Cash Flows (Unaudited) for the nine months ended September 30, 2018 and 2017		108
Notes to Financial Statements		109

TEUCRIUM COMMODITY TRUST

COMBINED STATEMENTS OF ASSETS AND LIABILITIES

	September 30, 2018	December 31, 2017
	(Unaudited)
Assets
Cash and cash equivalents	$171,710,290	$137,945,626
Interest receivable	111	255
Other assets	11,645	6,748
Equity in trading accounts:
Commodity futures contracts	517,664	909,281
Due from broker	12,866,573	9,987,671
Total equity in trading accounts	13,384,237	10,896,952
Total assets	185,106,283	$148,849,581

Liabilities
Management fee payable to Sponsor	143,420	125,149
Cash equivalent payable	7,481,728	-
Interest Payable	70	-
Other liabilities	410,113	99,909
Equity in trading accounts:
Commodity futures contracts	5,735,272	5,677,771
Total liabilities	13,770,603	5,902,829

Net Assets	$171,335,680	$142,946,752

The accompanying notes are an integral part of these financial statements.

TEUCRIUM COMMODITY TRUST

COMBINED SCHEDULE OF INVESTMENTS

September 30, 2018

(Unaudited)

			Percentage of
Description: Assets	Fair Value		Net Assets			Shares

Cash equivalents
Money market funds
Fidelity Institutional Money Market Funds - Government Portfolio (cost $3,577)	$	3,577		0.00	%		3,577

						Principal Amount
Commercial Paper
Enbridge Energy Partners, L.P. 2.86% (cost: $4,973,666 due 10/05/2018)	$	4,998,428		2.92	%		5,000,000
Enbridge Energy Partners, L.P. 2.77% (cost: $4,988,924 due 10/10/2018)		4,996,562		2.92			5,000,000
Enbridge Energy Partners, L.P. 2.86% (cost: $9,953,620 due 10/12/2018)		9,991,352		5.83			10,000,000
Energy Transfer Partners, L.P. 2.57% (cost: $4,994,688 due 10/10/2018)		4,996,812		2.92			5,000,000
Energy Transfer Partners, L.P. 2.55% (cost: $14,972,592 due 10/22/2018)		14,977,865		8.74			15,000,000
General Motors Financial Company, Inc. 2.42% (cost: $7,469,500 due 10/01/2018)		7,500,000		4.38			7,500,000
General Motors Financial Company, Inc. 2.42% (cost: $4,980,666 due 10/04/2018)		4,999,000		2.92			5,000,000
General Motors Financial Company, Inc. 2.53% (cost: $4,979,432 due 11/26/2018)		4,980,478		2.91			5,000,000
General Motors Financial Company, Inc. 2.55% (cost: $2,492,270 due 11/14/2018)		2,492,270		1.45			2,500,000
Royal Caribbean Cruise Ltd. 2.55% (cost: $4,989,458 due 10/31/2018)		4,989,458		2.91			5,000,000
Royal Caribbean Cruise Ltd. 2.52% (cost: $7,482,812 due 10/23/2018)		7,488,542		4.37			7,500,000
The Williams Companies, Inc 2.39% (cost: $7,495,557 due 10/03/2018)		7,499,013		4.38			7,500,000
The Williams Companies, Inc 2.65% (cost: $7,471,833 due 10/18/2018)		7,490,792		4.37			7,500,000
Total Commercial Paper (cost: $87,245,018)	$	87,400,572		51.02	%
Total Cash Equivalents	$	87,404,149		51.02	%
						Notional Amount
						(Long Exposure)
Commodity futures contracts
United States corn futures contracts
CBOT corn futures MAR19 (1,250 contracts)	$	10,587		0.01	%	$	23,000,000

United States soybean futures contracts
CBOT soybean futures MAR19 (198 contracts)		61,875		0.04	%		8,640,225

United States sugar futures contracts
ICE sugar futures JUL19 (354 contracts)		92,489		0.05	%		4,523,837

United States wheat futures contracts
CBOT wheat futures MAR19 (823 contracts)		352,713		0.21	%		21,696,338
Total commodity futures contracts	$	517,664		0.31	%	$	57,860,400

			Percentage of			Notional Amount
Description: Liabilities	Fair Value		Net Assets			(Long Exposure)

Commodity futures contracts
United States corn futures contracts
CBOT corn futures MAY19 (1,050 contracts)	$	246,675		0.14	%	$	19,726,875
CBOT corn futures DEC19 (1,177 contracts)		1,554,975		0.91			23,025,063

United States soybean futures contracts
CBOT soybean futures JAN19 (235 contracts)		889,175		0.52	%		10,099,125
CBOT soybean futures NOV19 (223 contracts)		366,838		0.21			10,168,800

United States sugar futures contracts
ICE sugar futures MAY19 (419 contracts)		495,163		0.29	%		5,298,171
ICE sugar futures MAR20 (379 contracts)		547,333		0.32			5,259,307

United States wheat futures contracts
CBOT wheat futures MAY19 (686 contracts)		352,088		0.21	%		18,461,975
CBOT wheat futures DEC19 (758 contracts)		1,283,025		0.75			21,508,250
Total commodity futures contracts	$	5,735,272		3.35	%	$	113,547,566

Exchange-traded funds*						Shares
Teucrium Corn Fund	$	374,705		0.22	%		23,658
Teucrium Soybean Fund		378,926		0.22			23,931
Teucrium Sugar Fund		377,319		0.22			56,874
Teucrium Wheat Fund		367,102		0.21			58,837
Total exchange-traded funds (cost $2,081,910)	$	1,498,052		0.87	%

*The Trust eliminates the shares owned by the Teucrium Agricultural Fund from its combined statements of assets and liabilities due to the fact that these represent holdings of the Underlying Funds owned by the Teucrium Agricultural Fund, which are included as shares outstanding of the Underlying Funds.

The accompanying notes are an integral part of these financial statements.

TEUCRIUM COMMODITY TRUST

COMBINED SCHEDULE OF INVESTMENTS

December 31, 2017

		Percentage of
Description: Assets	Fair Value	Net Assets	Shares

Cash equivalents
Money market funds
Fidelity Institutional Money Market Funds - Government Portfolio (cost $2,874)	$2,874	0.00%	2,874
Blackrock FedFund - Institutional Class (cost $140)	140	0.00	140
Total money market funds	$3,014	0.00%

			Principal Amount
Commercial Paper
Boston Scientific Corporation 1.71% (cost: $4,992,208 due 1/16/2018)	$4,996,458	3.50%	5,000,000
Canadian Natural Resources Limited 1.76% (cost: $4,990,034 due 1/31/2018)	4,992,708	3.49	5,000,000
E. I. du Pont de Nemours and Company 1.67% (cost: $4,981,556 due 3/5/2018)	4,985,474	3.49	5,000,000
Enbridge Energy Partners, L.P. 2.20% (cost: $4,976,980 due 3/5/2018)	4,980,918	3.48	5,000,000
Equifax Inc. 1.71% (cost: $4,987,958 due 1/5/2018)	4,999,056	3.50	5,000,000
Ford Motor Credit Company LLC 1.41% (cost: $4,982,500 due 1/10/2018)	4,998,250	3.50	5,000,000
Glencore Funding LLC 1.42% (cost: $4,982,496 due 1/17/2018)	4,996,854	3.50	5,000,000
HP Inc. 1.65% (cost: $4,992,028 due 1/22/2018)	4,995,216	3.49	5,000,000
Oneok, Inc. 1.75% (cost: $4,994,684 due 1/5/2018)	4,999,034	3.50	5,000,000
VW Credit, Inc. 1.61% (cost: $4,980,000 due 3/6/2018)	4,985,778	3.49	5,000,000
Total Commercial Paper (total cost: $49,860,444)	49,929,746	34.94
Total Cash Equivalents	$49,932,760	34.94%

			Notional Amount
			(Long Exposure)
Commodity futures contracts
United States corn futures contracts
CBOT corn futures JUL18 (1,060 contracts)	$120,487	0.08%	$19,464,250

United States sugar futures contracts
ICE sugar futures MAY18 (133 contracts)	94,539	0.07	2,237,379
ICE sugar futures JUL18 (114 contracts)	89,780	0.06	1,920,307

United States wheat futures contracts
CBOT wheat futures JUL18 (813 contracts)	604,475	0.42	18,424,613
Total commodity futures contracts	$909,281	0.63%	$42,046,549

		Percentage of	Notional Amount
Description: Liabilities	Fair Value	Net Assets	(Long Exposure)

Commodity futures contracts
United States corn futures contracts
CBOT corn futures MAY18 (1,265 contracts)	$821,825	0.57%	$22,706,750
CBOT corn futures DEC18 (1,184 contracts)	1,140,225	0.80	22,732,800

United States soybean futures contracts
CBOT soybean futures MAR18 (75 contracts)	174,063	0.12	3,606,563
CBOT soybean futures MAY18 (63 contracts)	152,338	0.11	3,064,950
CBOT soybean futures NOV18 (74 contracts)	121,662	0.09	3,610,275

United States sugar futures contracts
ICE sugar futures MAR19 (126 contracts)	67,133	0.05	2,214,173

United States wheat futures contracts
CBOT wheat futures MAY18 (976 contracts)	1,182,225	0.83	21,484,200
CBOT wheat futures DEC18 (893 contracts)	2,018,300	1.41	21,521,300
Total commodity futures contracts	$5,677,771	3.98%	$100,941,011

Exchange-traded funds*			Shares
Teucrium Corn Fund	$287,376	0.20%	17,158
Teucrium Soybean Fund	273,664	0.19	15,331
Teucrium Sugar Fund	289,049	0.20	29,524
Teucrium Wheat Fund	286,031	0.20	47,737
Total exchange-traded funds (cost $1,790,621)	$1,136,120	0.79%

The accompanying notes are an integral part of these financial statements.

TEUCRIUM COMMODITY TRUST

COMBINED STATEMENTS OF OPERATIONS

(Unaudited)

	Three months ended	Three months ended	Nine months ended	Nine months ended
	September 30, 2018	September 30, 2017	September 30, 2018	September 30, 2017
Income
Realized and unrealized gain (loss) on trading of commodity futures contracts:
Realized loss on commodity futures contracts	$(12,210,874)	$(363,195)	$(5,518,367)	$(3,036,823)
Net change in unrealized appreciation or (depreciation) on commodity futures contracts	6,804,734	(13,715,137)	(449,117)	(1,084,644)
Interest income	995,171	489,124	2,514,842	1,229,246
Total loss	(4,410,969)	(13,589,208)	(3,452,642)	(2,892,221)

Expenses
Management fees	453,301	379,462	1,269,139	1,155,626
Professional fees	421,519	352,288	1,123,516	983,524
Distribution and marketing fees	854,026	715,384	2,416,995	1,912,998
Custodian fees and expenses	103,629	91,666	287,652	263,485
Business permits and licenses fees	17,425	19,849	105,151	77,862
General and administrative expenses	72,069	74,494	229,953	220,472
Brokerage commissions	56,262	44,377	144,986	121,696
Other expenses	33,511	23,979	99,650	67,375
Total expenses	2,011,742	1,701,499	5,677,042	4,803,038

Expenses waived by the Sponsor	(319,431)	(284,299)	(961,565)	(545,764)

Total expenses, net	1,692,311	1,417,200	4,715,477	4,257,274

Net loss	$(6,103,280)	$(15,006,408)	$(8,168,119)	$(7,149,495)

The accompanying notes are an integral part of these financial statements.

TEUCRIUM COMMODITY TRUST

COMBINED STATEMENTS OF CHANGES IN NET ASSETS

(Unaudited)

	Nine months ended	Nine months ended
	September 30, 2018	September 30, 2017
Operations
Net loss	$(8,168,119)	$(7,149,495)
Capital transactions
Issuance of Shares	79,071,522	76,238,431
Redemption of Shares	(41,941,536)	(61,140,856)
Net change in the cost of the Underlying Funds	(572,939)	3,049
Total capital transactions	36,557,047	15,100,624

Net change in net assets	28,388,928	7,951,129

Net assets, beginning of period	142,946,752	153,957,187

Net assets, end of period	$171,335,680	$161,908,316

The accompanying notes are an integral part of these financial statements.

TEUCRIUM COMMODITY TRUST

COMBINED STATEMENTS OF CASH FLOWS

(Unaudited)

	Nine months ended	Nine months ended
	September 30, 2018	September 30, 2017
Cash flows from operating activities:
Net loss	$(8,168,119)	$(7,149,495)
Adjustments to reconcile net loss to net cash used in operating activities:
Net change in unrealized depreciation on commodity futures contracts	449,117	1,084,644
Changes in operating assets and liabilities:
Due from broker	(2,878,902)	(82,670)
Interest receivable	214	(45)
Other assets	(4,897)	(84,299)
Management fee payable to Sponsor	18,271	(2,039)
Cash equivalent payable	7,481,728	-
Other liabilities	310,205	8,945
Net cash used in operating activities	(2,792,383)	(6,224,959)

Cash flows from financing activities:
Proceeds from sale of Shares	79,071,522	76,238,431
Redemption of Shares	(41,941,536)	(61,140,856)
Net change in cost of the Underlying Funds	(572,939)	3,049
Net cash provided by financing activities	36,557,047	15,100,624

Net change in cash, cash equivalents and restricted cash	33,764,664	8,875,665
Cash, cash equivalents, and restricted cash beginning of period	137,945,626	145,475,153
Cash, cash equivalents, and restricted cash end of period	$171,710,290	$154,350,818

The accompanying notes are an integral part of these financial statements.

NOTES TO COMBINED FINANCIAL STATEMENTS

September 30, 2018

(Unaudited)

Note 1 – Organization and Operation

Teucrium Commodity Trust (“Trust”), a Delaware statutory trust organized on September 11, 2009, is a series trust consisting of five series: Teucrium Corn Fund (“CORN”), Teucrium Sugar Fund (“CANE”), Teucrium Soybean Fund (“SOYB”), Teucrium Wheat Fund (“WEAT”), and Teucrium Agricultural Fund (“TAGS”). All these series of the Trust are collectively referred to as the “Funds” and singularly as the “Fund.” Each Fund is a commodity pool that is a series of the Trust. The Funds issue common units, called the “Shares,” representing fractional undivided beneficial interests in a Fund. Effective as of April 16, 2018, the Trust and the Funds operate pursuant to the Trust’s Third Amended and Restated Declaration of Trust and Trust Agreement (the “Trust Agreement”).

On June 5, 2010, the initial Form S-1 for CORN was declared effective by the U.S. Securities and Exchange Commission (“SEC”). On June 8, 2010, four Creation Baskets for CORN were issued representing 200,000 shares and $5,000,000. CORN began trading on the New York Stock Exchange (“NYSE”) Arca on June 9, 2010. The current registration statement for CORN was declared effective by the SEC on April 29, 2016.

On June 17, 2011, the initial Forms S-1 for CANE, SOYB, and WEAT were declared effective by the SEC. On September 16, 2011, two Creation Baskets were issued for each Fund, representing 100,000 shares and $2,500,000, for CANE, SOYB, and WEAT. On September 19, 2011, CANE, SOYB, and WEAT started trading on the NYSE Arca. The current registration statements for CANE and SOYB were declared effective by the SEC on April 30, 2018. The registration statements for SOYB and CANE registered an additional 5,000,000 shares each. The current registration statement for WEAT was declared effective on July 15, 2016. This registration statement for WEAT registered an additional 24,050,000 shares.

On February 10, 2012, the Form S-1 for TAGS was declared effective by the SEC. On March 27, 2012, six Creation Baskets for TAGS were issued representing 300,000 shares and $15,000,000. TAGS began trading on the NYSE Arca on March 28, 2012. The current registration statement for TAGS was declared effective by the SEC on April 30, 2018.

The Sponsor is a member of the National Futures Association (the "NFA") and became a commodity pool operator ("CPO") registered with the Commodity Futures Trading Commission (the "CFTC") effective November 10, 2009. The Sponsor registered as a Commodity Trading Advisor ("CTA") with the CFTC effective September 8, 2017.

The specific investment objective of each Fund and information regarding the organization and operation of each Fund are included in each Fund’s financial statements and accompanying notes, as well as in other sections of this Form 10K filing. In general, the investment objective of each Fund is to have the daily changes in percentage terms of its Shares’ Net Asset Value (“NAV”) reflect the daily changes in percentage terms of a weighted average of the closing settlement prices for certain Futures Contracts for the commodity specified for that Fund. The investment objective of TAGS is to have the daily changes in percentage terms of NAV of its common units (“Shares”) reflect the daily changes in percentage terms of a weighted average (the “Underlying Fund Average”) of the NAVs per share of four other commodity pools that are series of the Trust and are sponsored by the Sponsor: CORN, WEAT, SOYB, and CANE (collectively, the “Underlying Funds”). The Underlying Fund Average will have a weighting of 25% to each Underlying Fund, and the Fund’s assets will be rebalanced to maintain the approximate 25% allocation to each Underlying Fund.

The accompanying unaudited financial statements have been prepared in accordance with Rule 10-01 of Regulation S-X promulgated by the SEC and, therefore, do not include all information and footnote disclosures required under accounting principles generally accepted in the United States of America (“GAAP”). The financial information included herein is unaudited; however, such financial information reflects all adjustments which are, in the opinion of management, necessary for the fair presentation of the Trust’s financial statements for the interim period. It is suggested that these interim financial statements be read in conjunction with the financial statements and related notes included in the Trust’s Annual Report on Form 10-K, as applicable. The operating results for the three and nine months ended September 30, 2018 are not necessarily indicative of the results to be expected for the full year ending December 31, 2018.

Subject to the terms of the Trust Agreement, Teucrium Trading, LLC in its capacity as the Sponsor (“Sponsor”) may terminate a Fund at any time, regardless of whether the Fund has incurred losses, including, for instance, if it determines that the Fund’s aggregate net assets in relation to its operating expenses make the continued operation of the Fund unreasonable or imprudent. However, no level of losses will require the Sponsor to terminate a Fund.

Note 2 – Principal Contracts and Agreements

On August 17, 2015 (the “Conversion Date”), U.S. Bank N.A. replaced The Bank of New York Mellon as the Custodian for the Funds. The principal business address for U.S. Bank N.A is 1555 North Rivercenter Drive, Suite 302, Milwaukee, Wisconsin 53212. U.S. Bank N.A. is a Wisconsin state chartered bank subject to regulation by the Board of Governors of the Federal Reserve System and the Wisconsin State Banking Department. The principal address for U.S. Bancorp Fund Services, LLC (“USBFS”) is 615 E. Michigan Street, Milwaukee, WI 53202. In addition, effective on the Conversion Date, USBFS, a wholly owned subsidiary of U.S. Bank, commenced serving as administrator for each Fund, performing certain administrative and accounting services and preparing certain SEC reports on behalf of the Funds, and also became the registrar and transfer agent for each Fund’s Shares. For such services, U.S. Bank and USBFS will receive an asset based fee, subject to a minimum annual fee.

For custody services, the Funds will pay to U.S. Bank N.A. 0.0075% of average gross assets up to $1 billion, and .0050% of average gross assets over $1 billion, annually, plus certain per-transaction charges. For Transfer Agency, Fund Accounting and Fund Administration services, which are based on the total assets for all the Funds in the Trust, the Funds will pay to USBFS 0.06% of average gross assets on the first $250 million, 0.05% on the next $250 million, 0.04% on the next $500 million and 0.03% on the balance over $1 billion annually. A combined minimum annual fee of up to $64,500 for custody, transfer agency, accounting and administrative services is assessed per Fund. These services are recorded in custodian fees and expenses on the combined statements of operations. A summary of these expenses is included below.

The Sponsor employs Foreside Fund Services, LLC (“Foreside” or the “Distributor”) as the Distributor for the Funds. The Distribution Services Agreement among the Distributor and the Sponsor calls for the Distributor to work with the Custodian in connection with the receipt and processing of orders for Creation Baskets and Redemption Baskets and the review and approval of all Fund sales literature and advertising materials. The Distributor and the Sponsor have also entered into a Securities Activities and Service Agreement (the “SASA”) under which certain employees and officers of the Sponsor are licensed as registered representatives or registered principals of the Distributor, under Financial Industry Regulatory Authority (“FINRA”) rules. For its services as the Distributor, Foreside receives a fee of 0.01% of the Fund’s average daily net assets and an aggregate annual fee of $100,000 for all Teucrium Funds, along with certain expense reimbursements. For its services under the SASA, Foreside receives a fee of $5,000 per registered representative and $1,000 per registered location. These services are recorded in distribution and marketing fees on the combined statements of operations. A summary of these expenses is included below.

ED&F Man Capital Markets, Inc. (“ED&F Man”) serves as the Underlying Funds’ clearing broker to execute and clear the Underlying Funds’ futures and provide other brokerage-related services. ED&F Man is registered as a FCM with the U.S. CFTC and is a member of the NFA. ED&F Man is also registered as a broker/dealer with the U.S. Securities and Exchange Commission and is a member of the FINRA. ED&F Man is a clearing member of ICE Futures U.S., Inc., Chicago Board of Trade, Chicago Mercantile Exchange, New York Mercantile Exchange, and all other major United States commodity exchanges. For Corn, Soybean, Sugar and Wheat Futures Contracts ED&F Man is paid $9.00 per round turn. These expenses are recorded in brokerage commissions on the combined statements of operations. A summary of these expenses is included below.

The sole Trustee of the Trust is Wilmington Trust Company, a Delaware banking corporation. The Trustee will accept service of legal process on the Trust in the State of Delaware and will make certain filings under the Delaware Statutory Trust Act. For its services, the Trustee receives an annual fee of $3,300 from the Trust. These services are recorded in business permits and licenses fees on the combined statements of operations. A summary of these expenses is included below.

	Three months Ended	Three months Ended	Nine months Ended	Nine months Ended
	September 30, 2018	September 30, 2017	September 30, 2018	September 30, 2017
Amount Recognized for Custody Services	$103,629	$91,666	$287,651	$263,485
Amount of Custody Services Waived	$33,628	$7,972	$78,067	$12,611

Amount Recognized for Distribution Services	$40,200	$42,782	$127,401	$136,568
Amount of Distribution Services Waived	$15,565	$13,582	$37,156	$27,719

Amount Recognized for Brokerage Commissions	$50,414	$44,377	$139,138	$121,696
Amount of Brokerage Commissions Waived	$-	$-	$-	$-

Amount Recognized for Wilmington Trust	$3,160	$3,072	$3,160	$3,072
Amount of Wilmington Trust Waived	$24	$1,515	$24	$1,515

Note 3 – Summary of Significant Accounting Policies

Basis of Presentation

The accompanying financial statements have been prepared on a combined basis in conformity with accounting principles generally accepted in the United States of America (“U.S. GAAP”) as detailed in the Financial Accounting Standards Board’s Accounting Standards Codification and include the accounts of the Trust, CORN, CANE, SOYB, WEAT and TAGS. Refer to the accompanying separate financial statements for each Fund for more detailed information. For the periods represented by the financial statements herein the operations of the Trust contain the results of CORN, SOYB, CANE, WEAT, and TAGS except for eliminations for TAGS as explained below for the months during which each Fund was in operation.

In accordance with ASU 2016-18 issued by the Financial Accounting Standards Board ("FASB"), the presentation of cash and cash equivalents and restricted cash is disaggregated by line item on the combined statements of assets and liabilities and sum to the total amount of cash, cash equivalents, and restricted cash at the end of the corresponding period shown on the combined statements of cash flows. This update in presentation did not have a material impact on the financial statements and disclosures of the Trust and the Funds.

Given the investment objective of TAGS as described in Note 1 above, TAGS will buy, sell and hold, as part of its normal operations, shares of the four Underlying Funds. The Trust eliminates the shares of the other series of the Trust owned by the Teucrium Agricultural Fund from its combined statements of assets and liabilities. The Trust eliminates the net change in unrealized appreciation or depreciation on securities owned by the Teucrium Agricultural Fund from its combined statements of operations. The combined statements of changes in net assets and cash flows present a net presentation of the purchases and sales of the Underlying Funds of TAGS.

Revenue Recognition

Commodity futures contracts are recorded on the trade date. All such transactions are recorded on the identified cost basis and marked to market daily. Unrealized appreciation or depreciation on commodity futures contracts are reflected in the combined statements of operations as the difference between the original contract amount and the fair market value as of the last business day of the year or as of the last date of the financial statements. Changes in the appreciation or depreciation between periods are reflected in the combined statements of operations. Interest on cash equivalents with financial institutions are recognized on the accrual basis. The Funds earn interest on funds held at the custodian and other financial institutions at prevailing market rates for such investments.

Beginning in October 2017, the Sponsor began investing a portion of cash in commercial paper, which is deemed a cash equivalent based on the rating and duration of contracts as described in the notes to the combined financial statements and reflected in cash and cash equivalents on the combined statements of assets and liabilities and in cash, cash equivalents and restricted cash on the combined statements of cash flows. Accretion on these investments are recognized using the effective interest method in U.S. dollars and included in interest income on the combined statements of operations.

Brokerage Commissions

Brokerage commissions on all open commodity futures contracts are accrued on the trade date and on a full-turn basis.

Income Taxes

The Trust, as a Delaware statutory trust, is considered a trust for federal tax purposes and is, thus, a pass through entity. For tax purposes, the Funds will be treated as partnerships. Therefore, the Funds do not record a provision for income taxes because the shareholders report their share of a Fund’s income or loss on their income tax returns. The financial statements reflect the Funds’ transactions without adjustment, if any, required for income tax purposes.

The Funds are required to determine whether a tax position is more likely than not to be sustained upon examination by the applicable taxing authority, including resolution of any related appeals or litigation processes, based on the technical merits of the position. The Funds file income tax returns in the U.S. federal jurisdiction, and may file income tax returns in various U.S. states and foreign jurisdictions. For all tax years 2015 to 2017, the Funds remain subject to income tax examinations by major taxing authorities. The tax benefit recognized is measured as the largest amount of benefit that has a greater than fifty percent likelihood of being realized upon ultimate settlement. De-recognition of a tax benefit previously recognized results in the Funds recording a tax liability that reduces net assets. Based on their analysis, the Funds have determined that they have not incurred any liability for unrecognized tax benefits as of September 30, 2018 and for the years ended December 31, 2017, 2016, and 2015. However, the Funds’ conclusions regarding this policy may be subject to review and adjustment at a later date based on factors including, but not limited to, ongoing analysis of and changes to tax laws, regulations, and interpretations thereof.

The Funds recognize interest accrued related to unrecognized tax benefits and penalties related to unrecognized tax benefits in income tax fees payable, if assessed. No interest expense or penalties have been recognized as of and for the three and nine months ended September 30, 2018 and 2017.

The Funds may be subject to potential examination by U.S. federal, U.S. state, or foreign jurisdictional authorities in the area of income taxes. These potential examinations may include questioning the timing and amount of deductions, the nexus of income among various tax jurisdictions, and compliance with U.S. federal, U.S. state and foreign tax laws. The Funds’ management does not expect that the total amount of unrecognized tax benefits will materially change over the next twelve months. In the opinion of the Sponsor, the 2017 Tax Cuts and Jobs Act, will not have a significant impact on the Trust or the Funds and did not have a significant impact on the financial statements of the Trust and the Funds.

Creations and Redemptions

Authorized Purchasers may purchase Creation Baskets from each Fund. The amount of the proceeds required to purchase a Creation Basket will be equal to the NAV of the shares in the Creation Basket determined as of 4:00 p.m. New York time on the day the order to create the basket is properly received.

Authorized Purchasers may redeem shares from each Fund only in blocks of shares called “Redemption Baskets.” The amount of the redemption proceeds for a Redemption Basket will be equal to the NAV of the shares in the Redemption Basket determined as of 4:00 p.m. New York time on the day the order to redeem the basket is properly received.

Each Fund receives or pays the proceeds from shares sold or redeemed within three business days after the trade date of the purchase or redemption. The amounts due from Authorized Purchasers are reflected in the statements of assets and liabilities as receivable for shares sold. Amounts payable to Authorized Purchasers upon redemption are reflected in the statements of assets and liabilities as payable for shares redeemed.

There are a minimum number of baskets and associated Shares specified for each Fund in the Fund’s respective prospectus, as amended from time to time. If a Fund experienced redemptions that caused the number of Shares outstanding to decrease to the minimum level of Shares required to be outstanding, until the minimum number of Shares is again exceeded through the purchase of a new Creation Basket, there can be no more redemptions by an Authorized Purchaser. These minimum levels are as follows:

CORN: 50,000 shares representing 2 baskets

SOYB: 50,000 shares representing 2 baskets

CANE: 50,000 shares representing 2 baskets

WEAT: 50,000 shares representing 2 baskets

TAGS: 50,000 shares representing 4 baskets

Cash, Cash Equivalents, and Restricted Cash

Cash equivalents are highly liquid investments with maturity dates of 90 days or less when acquired. The Trust reported its cash equivalents in the combined statements of assets and liabilities at market value, or at carrying amounts that approximate fair value, because of their highly liquid nature and short term maturities. Each Fund that is a series of the Trust has the balance of its cash equivalents on deposit with financial institutions. The Trust holds a balance in money market funds that is included in cash and cash equivalents on the combined statements of assets and liabilities. Effective in the second quarter 2015, the Sponsor invested a portion of the available cash for the Funds in alternative demand deposit savings accounts, which is classified as cash and not as cash equivalents. Assets deposited with the bank may, at times, exceed federally insured limits. Effective in the fourth quarter 2017, the Sponsor invested a portion of the available cash for the Funds in investment grade commercial paper with durations of 90 days or less, which is classified as a cash equivalent and is not FDIC insured. Effective August 13, 2018, the Sponsor invested a portion of the available cash for the Funds in a Promontory Insured Cash Sweep ("ICS") product, which is classified as cash and not a cash equivalent. The entire balance held in the Promontory Insured Cash Sweep product is FDIC insured.

	September 30, 2018	September 30, 2017	December 31, 2017
Money Market Funds	$3,577	$2,318,065	$3,014
Demand Deposit Savings Accounts	$68,271,037	$152,013,174	$88,013,073
Commercial Paper	$87,400,572	$-	$49,929,746
Promontory ICS Deposits	$16,035,611	$-	$-

On August 17, 2015 (the “Conversion Date”), U.S. Bank N.A. replaced The Bank of New York Mellon as the Custodian for the Funds. Per the amended agreement between the Sponsor and The Bank of New York Mellon dated August 14, 2015, certain cash amounts for each Fund, except in the case of TAGS, are to remain at The Bank of New York Mellon until amounts for services and early termination fees are paid. The amended agreement allows for payments for such amounts owed to be made through December 31, 2017. Cash balances that are held in custody at The Bank of New York Mellon under this amended agreement are reflected as restricted cash on the financial statements of the Trust and Funds. The following table provides a reconciliation of cash and cash equivalents, and restricted cash reported within the combined statements of assets and liabilities that sum to the total of the same such amounts shown in the combined statements of cash flows.

	September 30, 2018	September 30, 2017	December 31, 2017
Cash and cash equivalents	$171,710,290	$154,329,202	$137,945,626
Restricted cash	$-	$21,616	$-
Total cash, cash equivalents, and restricted cash shown in the combined statements of cash flows	$171,710,290	$154,350,818	$137,945,626

Due from/to Broker

The amount recorded by the Trust for the amount due from and to the clearing broker includes, but is not limited to, cash held by the broker, amounts payable to the clearing broker related to open transactions and payables for commodities futures accounts liquidating to an equity balance on the clearing broker’s records.

Margin is the minimum amount of funds that must be deposited by a commodity interest trader with the trader’s broker to initiate and maintain an open position in futures contracts. A margin deposit acts to assure the trader’s performance of the futures contracts purchased or sold. Futures contracts are customarily bought and sold on initial margin that represents a very small percentage of the aggregate purchase or sales price of the contract. Because of such low margin requirements, price fluctuations occurring in the futures markets may create profits and losses that, in relation to the amount invested, are greater than are customary in other forms of investment or speculation. As discussed below, adverse price changes in the futures contract may result in margin requirements that greatly exceed the initial margin. In addition, the amount of margin required in connection with a particular futures contract is set from time to time by the exchange on which the contract is traded and may be modified from time to time by the exchange during the term of the contract. Brokerage firms, such as the Funds’ clearing brokers, carrying accounts for traders in commodity interest contracts generally require higher amounts of margin as a matter of policy to further protect themselves. Over-the-counter trading generally involves the extension of credit between counter-parties, so the counter-parties may agree to require the posting of collateral by one or both parties to address credit exposure.

When a trader purchases an option, there is no margin requirement; however, the option premium must be paid in full. When a trader sells an option, on the other hand, he or she is required to deposit margin in an amount determined by the margin requirements established for the underlying interest and, in addition, an amount substantially equal to the current premium for the option. The margin requirements imposed on the selling of options, although adjusted to reflect the probability that out-of-the-money options will not be exercised, can in fact be higher than those imposed in dealing in the futures markets directly. Complicated margin requirements apply to spreads and conversions, which are complex trading strategies in which a trader acquires a mixture of options positions and positions in the underlying interest.

Ongoing or “maintenance” margin requirements are computed each day by a trader’s clearing broker. When the market value of a particular open futures contract changes to a point where the margin on deposit does not satisfy maintenance margin requirements, a margin call is made by the broker. If the margin call is not met within a reasonable time, the broker may close out the trader’s position. With respect to the Funds’ trading, the Funds (and not their shareholders personally) are subject to margin calls.

Finally, many major U.S. exchanges have passed certain cross margining arrangements involving procedures pursuant to which the futures and options positions held in an account would, in the case of some accounts, be aggregated, and margin requirements would be assessed on a portfolio basis, measuring the total risk of the combined positions.

Payable/Receivable for Securities Purchased/Sold

Due from/to broker for investments in securities are securities transactions pending settlement. The Trust and the Funds are subject to credit risk to the extent any broker with whom it conducts business is unable to fulfill contractual obligations on its behalf. The management of the Trust and the Funds monitors the financial condition of such brokers and does not anticipate any losses from these counter-parties. Since the inception of the Fund, the principal broker through which the Trust and TAGS can execute securities transactions for TAGS is the Bank of New York Mellon Capital Markets.

Sponsor Fee, Allocation of Expenses and Related Party Transactions

The Fund’s sponsor is Teucrium Trading, LLC (the “Sponsor”). The Sponsor is responsible for investing the assets of the Funds in accordance with the objectives and policies of each Fund. In addition, the Sponsor arranges for one or more third parties to provide administrative, custodial, accounting, transfer agency and other necessary services to the Trust and the Funds. In addition, the Sponsor elected not to outsource services directly attributable to the Trust and the Funds such as accounting, financial reporting, regulatory compliance and trading activities. In addition, the Funds, except for TAGS which has no such fee, are contractually obligated to pay a monthly management fee to the Sponsor, based on average daily net assets, at a rate equal to 1.00% per annum.

The Funds pay for all brokerage fees, taxes and other expenses, including licensing fees for the use of intellectual property, registration or other fees paid to the SEC, FINRA (formerly the National Association of Securities Dealers) or any other regulatory agency in connection with the offer and sale of subsequent Shares, after its initial registration, and all legal, accounting, printing and other expenses associated therewith. The Funds also pay the fees and expenses associated with the Trust’s tax accounting and reporting requirements. Certain aggregate expenses common to all Funds within the Trust are allocated by the Sponsor to the respective Fund based on activity drivers deemed most appropriate by the Sponsor for such expenses, including but not limited to relative assets under management and creation and redeem order activity.

These aggregate common expenses include, but are not limited to, legal, auditing, accounting and financial reporting, tax-preparation, regulatory compliance, trading activities, and insurance costs, as well as fees paid to the Distributor, which are included in the related line item in the combined statements of operations. A portion of these aggregate common expenses are related to the Sponsor or related parties of principals of the Sponsor; these are necessary services to the Trust and the Funds, which are primarily the cost of performing accounting and financial reporting, regulatory compliance, and trading activities that are directly attributable to the Trust and the Funds. Such expenses are primarily included as distribution and marketing fees.

	Three months Ended	Three months Ended	Nine months Ended	Nine months Ended
	September 30, 2018	September 30, 2017	September 30, 2018	September 30, 2017
Recognized Related Party Transactions	$470,347	$454,469	$1,923,198	$1,747,602
Waived Related Party Transactions	$132,156	$169,163	$383,327	$292,825

The Sponsor has the ability to elect to pay certain expenses on behalf of the Funds or waive the management fee. This election is subject to change by the Sponsor, at its discretion. Expenses paid by the Sponsor and Management fees waived by the Sponsor are, if applicable, presented as waived expenses in the statements of operations for each Fund. The Sponsor has determined that there would be no recovery sought for the amounts below in any future period.

	CORN	SOYB	CANE	WEAT	TAGS	Trust
Three Months Ended September 30, 2018	$32,123	$163,478	$71,371	$43,831	$8,628	$319,431
Three Months Ended September 30, 2017	$95,836	$31,348	$45,186	$105,942	$5,987	$284,299
Nine Months Ended September 30, 2018	$170,846	$347,905	$218,270	$188,615	$35,929	$961,565
Nine Months Ended September 30, 2017	$264,656	$58,457	$83,550	$105,942	$33,159	$545,764

Use of Estimates

The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amount of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of the revenue and expenses during the reporting period. Actual results could differ from those estimates.

Fair Value - Definition and Hierarchy

In accordance with U.S. GAAP, fair value is defined as the price that would be received to sell an asset or paid to transfer a liability (i.e., the “exit price”) in an orderly transaction between market participants at the measurement date.

In determining fair value, the Trust uses various valuation approaches. In accordance with U.S. GAAP, a fair value hierarchy for inputs is used in measuring fair value that maximizes the use of observable inputs and minimizes the use of unobservable inputs by requiring that the most observable inputs be used when available. Observable inputs are those that market participants would use in pricing the asset or liability based on market data obtained from sources independent of the Trust. Unobservable inputs reflect the Trust’s assumptions about the inputs market participants would use in pricing the asset or liability developed based on the best information available in the circumstances. The fair value hierarchy is categorized into three levels based on the inputs as follows:

Level 1 - Valuations based on unadjusted quoted prices in active markets for identical assets or liabilities that the Trust has the ability to access. Valuation adjustments and block discounts are not applied to Level 1 futures contracts held by CORN, SOYB, CANE and WEAT, the securities of the Underlying Funds held by TAGS, and any other securities held by any Fund, together referenced throughout this filing as “financial instruments.” Since valuations are based on quoted prices that are readily and regularly available in an active market, valuation of these securities does not entail a significant degree of judgment.

Level 2 - Valuations based on quoted prices in markets that are not active or for which all significant inputs are observable, either directly or indirectly.

Level 3 - Valuations based on inputs that are unobservable and significant to the overall fair value measurement.

The availability of valuation techniques and observable inputs can vary from financial instrument to financial instrument and is affected by a wide variety of factors including, the type of financial instrument, whether the financial instrument is new and not yet established in the marketplace, and other characteristics particular to the transaction. To the extent that valuation is based on models or inputs that are less observable or unobservable in the market, the determination of fair value requires more judgment. Those estimated values do not necessarily represent the amounts that may be ultimately realized due to the occurrence of future circumstances that cannot be reasonably determined. Because of the inherent uncertainty of valuation, those estimated values may be materially higher or lower than the values that would have been used had a ready market for the financial instruments existed. Accordingly, the degree of judgment exercised by the Fund in determining fair value is greatest for financial instruments categorized in Level 3. In certain cases, the inputs used to measure fair value may fall into different levels of the fair value hierarchy. In such cases, for disclosure purposes, the level in the fair value hierarchy, within which the fair value measurement in its entirety falls, is determined based on the lowest level input that is significant to the fair value measurement.

Fair value is a market-based measure considered from the perspective of a market participant rather than an entity-specific measure. Therefore, even when market assumptions are not readily available, the Trust’s own assumptions are set to reflect those that market participants would use in pricing the asset or liability at the measurement date. The Trust uses prices and inputs that are current as of the measurement date, including periods of market dislocation. In periods of market dislocation, the observability of prices and inputs may be reduced for many financial instruments. This condition could cause a financial instrument to be reclassified to a lower level within the fair value hierarchy. For instance, when Corn Futures Contracts on the Chicago Board of Trade (“CBOT”) are not actively trading due to a “limit-up” or ‘limit-down” condition, meaning that the change in the Corn Futures Contracts has exceeded the limits established, the Trust and the Fund will revert to alternative verifiable sources of valuation of its assets. When such a situation exists on a quarter close, the Sponsor will calculate the NAV on a particular day using the Level 1 valuation, but will later recalculate the NAV for the impacted Fund based upon the valuation inputs from these alternative verifiable sources (Level 2 or Level 3) and will report such NAV in its applicable financial statements and reports.

On September 30, 2018 and December 31, 2017, in the opinion of the Trust, the reported value at the close of the market for each commodity contract fairly reflected the value of the futures and no alternative valuations were required. The determination is made as of the settlement of the futures contracts on the last day of trading for the reporting period. In making the determination of a Level 1 or Level 2 transfer, the Funds consider the average volume of the specific underlying futures contracts traded on the relevant exchange for the periods being reported.

For the nine months ended September 30, 2018 and year ended December 31, 2017, the Funds did not have any significant transfers between any of the levels of the fair value hierarchy.

The Funds and the Trust record their derivative activities at fair value. Gains and losses from derivative contracts are included in the statements of operations. Derivative contracts include futures contracts related to commodity prices. Futures, which are listed on a national securities exchange, such as the CBOT and the ICE, or reported on another national market, are generally categorized in Level 1 of the fair value hierarchy. OTC derivatives contracts (such as forward and swap contracts), which may be valued using models, depending on whether significant inputs are observable or unobservable, are categorized in Levels 2 or 3 of the fair value hierarchy.

Investments in the securities of the Underlying Funds are freely traded and listed on the NYSE Arca. These investments are valued at the NAV of the Underlying Fund as of the valuation date as calculated by the administrator based on the exchange-quoted prices of the commodity futures contracts held by the Underlying Fund.

Expenses

Expenses are recorded using the accrual method of accounting.

New Accounting Pronouncements

The Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2018-13: “Fair Value Measurement (Topic 820): Disclosure Framework – Changes to the Disclosure Requirements for Fair Value Measurement. These amendments modify public and private company fair value disclosure requirements. While some disclosures were removed or modified, others were added. The guidance is a result of the FASB’s test of the principals developed to improve the effectiveness of disclosures in the notes to the financial statements. The amendments will be effective for fiscal years and interim periods beginning after December 15, 2019 and may be adopted early. The Sponsor is evaluating the impacts, specifically, the removal, modification and addition to the fair value disclosures of the Trust or the Funds.

The FASB issued ASU 2018-05, “Income Taxes (Topic 740): Amendments to SEC Paragraphs Pursuant to SEC Staff Accounting Bulletin No. 118." These amendments add guidance to the FASB Accounting Standards Codification regarding the Tax Cuts and Jobs Act (Act). The amendments were adopted for the quarter ended March 31, 2018; the adoption did not have a material impact on the financial statements and disclosures of the Trust or the Funds.

The FASB issued ASU 2018-03: “Technical Corrections and Improvements to Financial Instruments—Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities, that clarifies the guidance in ASU No. 2016-01, Financial Instruments—Overall (Subtopic 825-10).” These amendments clarify the guidance in ASU No. 2016-01 on issues related to Fair Value and Forward Contracts and Purchased Options. The amendments are effective for fiscal years beginning after December 15, 2017. The adoption did not have a material impact on the financial statements and disclosures of the Trust or the Funds.

The FASB issued ASU 2017-13, “Revenue Recognition (Topic 605), Leases (Topic 840), and Leases (Topic 842): Amendments to SEC Paragraphs Pursuant to the Staff Announcement at the July 20, 2017 EITF Meeting and Rescission of Prior SEC Staff Announcements and Observer Comments”. The amendment amends the early adoption date option for certain companies related to adoption of ASU No. 2014-09 and ASU No. 2016-02. The SEC staff stated the SEC would not object to a public business entity that otherwise would not meet the definition of a public business entity except for a requirement to include or the inclusion of its financial statements or financial information in another entity’s filing with the SEC adopting ASC Topic 842 for fiscal years beginning after December 15, 2019, and interim periods within fiscal years beginning after December 15, 2020. This amendment is not expected to have a material impact on the financial statements and disclosures of the Trust or the Funds.

The FASB issued ASU 2017-12, “Derivatives and Hedging (Topic 815): Targeted Improvements to Accounting for Hedging Activities”. These amendments refine and expand hedge accounting for both financial (e.g., interest rate) and commodity risks. Its provisions create more transparency around how economic results are presented, both on the face of the financial statements and in the footnotes. It also makes certain targeted improvements to simplify the application of hedge accounting guidance. The amendments are effective for public companies for fiscal years beginning after December 15, 2018. This amendment is not expected to have any impact on the financial statements and disclosures of the Trust or the Funds.

The FASB issued ASU 2017-03, “Accounting Changes and Error Corrections (Topic 250) and Investments – Equity Method and Joint Ventures (Topic 323)”. These amendments require disclosure of the impact that recently issued accounting standards will have on the financial statements of a registrant when such standards are adopted in a future period. The amendments were adopted for the quarter ended March 31, 2017; the adoption did not have a material impact on the financial statements and disclosures of the Trust or the Funds.

The FASB issued ASU 2017-01, “Business Combinations (Topic 805): Clarifying the Definition of a Business”. The amendments are intended to help companies and other organizations evaluate whether transactions should be accounted for as acquisitions (or disposals) of assets or businesses. The amendments are effective for public companies for annual periods beginning after December 15, 2017, including interim periods within those periods. The adoption did not have a material impact on the financial statements and disclosures of the Trust or the Funds.

The FASB issued ASU 2016-18, “Statement of Cash Flows (Topic 230)”. The amendments in this update require that a statement of cash flows explain the change during the period in the total of cash, cash equivalents, and amounts generally described as restricted cash or restricted cash equivalents. Therefore, amounts generally described as restricted cash and restricted cash equivalents should be included with cash and cash equivalents when reconciling the beginning of period and end of period total amounts shown on the statement of cash flows. The amendments are effective for fiscal years beginning after December 15, 2017, and interim periods within those fiscal years. The Sponsor elected to early adopt ASU 2016-18 for the year ending December 31, 2017 and the adoption did not have a material impact on the financial statements and disclosures of the Trust or the Funds.

The FASB issued ASU 2014-09 in May 2014, “Revenue from Contracts with Customers (Topic 606),” which replaces the revenue recognition requirements of “Revenue Recognition (Topic 605).” This ASU is based on the principle that revenue is recognized to depict the transfer of goods and services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. This ASU provides new and more detailed guidance on specific topics and expands and improves disclosures about revenue. In August 2015, the FASB issued ASU 2015-14 which defers the effective date of ASU 2014-09 by one year to fiscal years beginning after December 15, 2017. ASU 2015-14 also permits early adoption of ASU 2014-09, but not before the original effective date, which was for fiscal years beginning after December 15, 2016. The Trust and the Fund record income or loss from the recognition and measurement of futures contracts and from interest income under Subtopic 825-10. Revenue from financial instruments which are valued under Subtopic 825 will not be subject to the application of ASU 2014-09 and 2015-14. The Sponsor elected to adopt the amendments for the fiscal year ending December 31, 2017. The adoption did not have a material impact on the financial statements and disclosures of the Trust or the Funds.

The FASB issued ASU 2016-11, “Revenue Recognition (Topic 605) and Derivatives and Hedging (Topic 815): Rescission of SEC Guidance Because of Accounting Standards Updates 2014-09 and 2014-16 Pursuant to Staff Announcements at the March 3, 2016 EITF Meeting”. The amendments make targeted improvements to clarify the principal versus agent assessment and are intended to make the guidance more operable and lead to more consistent application. The Trust and the Fund record income or loss from the recognition and measurement of futures contracts and from interest income under Subtopic 825-10. Revenue from financial instruments which are valued under Subtopic 825 will not be subject to the application of ASU 2016-11. The Sponsor elected to adopt ASU 2016-11 for the year ending December 31, 2017. The adoption did not have a material impact on the financial statements and disclosures of the Trust or the Funds.

The FASB issued ASU 2016-02, “Leases (Topic 842).” The amendments in this update increase transparency and comparability among organizations by recognizing lease assets and lease liabilities on the balance sheet and disclosing key information about leasing arrangements. The amendments in this update are effective for fiscal years beginning after December 15, 2018. This standard is not expected to have a material impact on the financial statements and disclosures of the Trust or the Funds.

The FASB issued ASU 2016-01, “Financial Instruments-Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities.” The amendments in this update are intended to improve the recognitions measurement and disclosure of financial instruments. The amendments to this update are effective for fiscal years beginning after December 15, 2017, and interim periods within those fiscal years. These amendments are required to be applied prospectively. The adoption did not have a material impact on the financial statements and disclosures of the Trust or the Funds.

Note 4 – Fair Value Measurements

The Trust’s assets and liabilities recorded at fair value have been categorized based upon a fair value hierarchy as described in the Trust’s significant accounting policies in Note 3. The following table presents information about the Trust’s assets and liabilities measured at fair value as of September 30, 2018 and December 31, 2017:

September 30, 2018

				Balance as of
Assets:	Level 1	Level 2	Level 3	September 30, 2018
Cash equivalents	$87,404,149	$-	$-	$87,404,149
Commodity futures contracts
Corn futures contracts	10,587	-	-	10,587
Soybean futures contracts	61,875	-	-	61,875
Sugar futures contracts	92,489	-	-	92,489
Wheat futures contracts	352,713	-	-	352,713
Total	$87,921,813	$-	$-	$87,921,813

				Balance as of
Liabilities	Level 1	Level 2	Level 3	September 30, 2018
Corn futures contracts	$1,801,650	$-	$-	$1,801,650
Soybean futures contracts	1,256,013	-	-	1,256,013
Sugar futures contracts	1,042,496	-	-	1,042,496
Wheat futures contracts	1,635,113	-	-	1,635,113
Total	$5,735,272	$-	$-	$5,735,272

December 31, 2017

				Balance as of
Assets:	Level 1	Level 2	Level 3	December 31, 2017
Cash equivalents	$49,932,760	$-	$-	$49,932,760
Commodity futures contracts
Corn futures contracts	120,487	-	-	120,487
Sugar futures contracts	184,319	-	-	184,319
Wheat futures contracts	604,475	-	-	604,475
Total	$50,842,041	$-	$-	$50,842,041

				Balance as of
Liabilities	Level 1	Level 2	Level 3	December 31, 2017
Corn futures contracts	$1,962,050	$-	$-	$1,962,050
Soybean futures contracts	448,063	-	-	448,063
Sugar futures contracts	67,133	-	-	67,133
Wheat futures contracts	3,200,525	-	-	3,200,525
Total	$5,617,771	$-	$-	$5,617,771

For the nine months ended September 30, 2018 and year ended December 31, 2017, the Funds did not have any significant transfers between any of the levels of the fair value hierarchy.

See the Fair Value - Definition and Hierarchy section in Note 3 above for an explanation of the transfers into and out of each level of the fair value hierarchy.

Note 5 – Derivative Instruments and Hedging Activities

In the normal course of business, the Funds utilize derivative contracts in connection with its proprietary trading activities. Investments in derivative contracts are subject to additional risks that can result in a loss of all or part of an investment. The Funds’ derivative activities and exposure to derivative contracts are classified by the following primary underlying risks: interest rate, credit, commodity price, and equity price risks. In addition to its primary underlying risks, the Funds are also subject to additional counter-party risk due to inability of its counter-parties to meet the terms of their contracts. For the nine months ended September 30, 2018 and year ended December 31, 2017, the Funds invested only in commodity futures contracts specifically related to each Fund.

Futures Contracts

The Funds are subject to commodity price risk in the normal course of pursuing their investment objectives. A futures contract represents a commitment for the future purchase or sale of an asset at a specified price on a specified date.

The purchase and sale of futures contracts requires margin deposits with a FCM. Subsequent payments (variation margin) are made or received by each Fund each day, depending on the daily fluctuations in the value of the contract, and are recorded as unrealized gains or losses by each Fund. Futures contracts may reduce the Funds’ exposure to counter-party risk since futures contracts are exchange-traded; and the exchange’s clearinghouse, as the counter-party to all exchange-traded futures, guarantees the futures against default.

The Commodity Exchange Act requires an FCM to segregate all customer transactions and assets from the FCM’s proprietary activities. A customer’s cash and other equity deposited with an FCM are considered commingled with all other customer funds subject to the FCM’s segregation requirements. In the event of an FCM’s insolvency, recovery may be limited to each Fund’s pro rata share of segregated customer funds available. It is possible that the recovery amount could be less than the total of cash and other equity deposited.

The following table discloses information about offsetting assets and liabilities presented in the statements of assets and liabilities to enable users of these financial statements to evaluate the effect or potential effect of netting arrangements for recognized assets and liabilities. These recognized assets and liabilities are presented as defined in the Financial Accounting Standards Board’s (“FASB”) Accounting Standards Update (“ASU”) No. 2011-11 “Balance Sheet (Topic 210): Disclosures about Offsetting Assets and Liabilities” and subsequently clarified in FASB ASU 2013-01 “Balance Sheet (Topic 210): Clarifying the Scope of Disclosures about Offsetting Assets and Liabilities.”

The following table also identifies the fair value amounts of derivative instruments included in the statements of assets and liabilities as derivative contracts, categorized by primary underlying risk and held by the FCM, ED&F Man as of September 30, 2018 and December 31, 2017.

Offsetting of Financial Assets and Derivative Assets as of September 30, 2018

	(i)	(ii)	(iii) = (i) - (ii)	(iv)		(v)=(iii)-(iv)
				Gross Amount Not Offset in the
				Statement of Assets and Liabilities
Description	Gross Amount of Recognized Assets	Gross Amount Offset in the Statement of Assets and Liabilities	Net Amount Presented in the Statement of Assets and Liabilities	Futures Contracts Available for Offset	Collateral, Due to Broker	Net Amount
Commodity Price
Corn futures contracts	$10,587	$-	$10,587	$10,587	$-	$-
Soybean futures contracts	$61,875	$-	$61,875	$61,875	$-	$-
Sugar futures contracts	$92,489	$-	$92,489	$92,489	$-	$-
Wheat futures contracts	$352,713	$-	$352,713	$352,713	$-	$-

Offsetting of Financial Liabilities and Derivative Liabilities as of September 30, 2018

	(i)	(ii)	(iii) = (i) - (ii)	(iv)		(v)=(iii)-(iv)
				Gross Amount Not Offset in the
				Statement of Assets and Liabilities
Description	Gross Amount of Recognized Liabilities	Gross Amount Offset in the Statement of Assets and Liabilities	Net Amount Presented in the Statement of Assets and Liabilities	Futures Contracts Available for Offset	Collateral, Due from Broker	Net Amount
Commodity Price
Corn futures contracts	$1,801,650	$-	$1,801,650	$10,587	$1,791,063	$-
Soybean futures contracts	$1,256,013	$-	$1,256,013	$61,875	$1,194,138	$-
Sugar futures contracts	$1,042,496	$-	$1,042,496	$92,489	$950,007	$-
Wheat futures contracts	$1,635,113	$-	$1,635,113	$352,713	$1,282,400	$-

Offsetting of Financial Assets and Derivative Assets as of December 31, 2017

	(i)	(ii)	(iii) = (i) - (ii)	(iv)		(v)=(iii)-(iv)
				Gross Amount Not Offset in the
				Statement of Assets and Liabilities
Description	Gross Amount of Recognized Assets	Gross Amount Offset in the Statement of Assets and Liabilities	Net Amount Presented in the Statement of Assets and Liabilities	Futures Contracts Available for Offset	Collateral, Due to Broker	Net Amount
Commodity Price
Corn futures contracts	$120,487	$-	$120,487	$120,487	$-	$-
Sugar futures contracts	$184,319	$-	$184,319	$67,133	$-	$117,186
Wheat futures contracts	$604,475	$-	$604,475	$604,475	$-	$-

Offsetting of Financial Liabilities and Derivative Liabilities as of December 31, 2017

	(i)	(ii)	(iii) = (i) - (ii)	(iv)		(v)=(iii)-(iv)
				Gross Amount Not Offset in the
				Statement of Assets and Liabilities
Description	Gross Amount of Recognized Liabilities	Gross Amount Offset in the Statement of Assets and Liabilities	Net Amount Presented in the Statement of Assets and Liabilities	Futures Contracts Available for Offset	Collateral, Due from Broker	Net Amount
Commodity Price
Corn futures contracts	$1,962,050	$-	$1,962,050	$120,487	$1,841,563	$-
Soybean futures contracts	$448,063	$-	$448,063	$-	$448,063	$-
Sugar futures contracts	$67,133	$-	$67,133	$67,133	$-	$-
Wheat futures contracts	$3,200,525	$-	$3,200,525	$604,475	$2,596,050	$-

The following is a summary of realized and unrealized gains (losses) of the derivative instruments utilized by the Trust:

Three months ended September 30, 2018

Primary Underlying Risk	Realized Loss on Commodity Futures Contracts	Net Change in Unrealized Appreciation or Depreciation on Commodity Futures Contracts
Commodity price
Corn futures contracts	$(6,989,488)	$4,859,838
Soybean futures contracts	(1,270,462)	827,925
Sugar futures contracts	(1,477,762)	(458,729)
Wheat futures contracts	(2,473,162)	1,575,700
Total commodity futures contracts	$(12,210,874)	$6,804,734

Three months ended September 30, 2017

Primary Underlying Risk	Realized (Loss) Gain on Commodity Futures Contracts	Net Change in Unrealized Depreciation or Appreciation on Commodity Futures Contracts
Commodity price
Corn futures contracts	$(1,616,988)	$(3,363,975 )
Soybean futures contracts	(24,025)	241,863
Sugar futures contracts	(678,070)	532,963
Wheat futures contracts	1,955,888	(11,125,988)
Total commodity futures contracts	$(363,195)	$(13,175,137)

Nine months ended September 30, 2018

Primary Underlying Risk	Realized (Loss) Gain on Commodity Futures Contracts	Net Change in Unrealized Appreciation or Depreciation on Commodity Futures Contracts
Commodity price
Corn futures contracts	$(3,818,950)	$50,500
Soybean futures contracts	(1,350,475)	(746,075)
Sugar futures contracts	(2,775,629)	(1,067,192)
Wheat futures contracts	2,426,687	1,313,650
Total commodity futures contracts	$(5,518,367)	$(449,117)

Nine months ended September 30, 2017

Primary Underlying Risk	Realized (Loss) Gain on Commodity Futures Contracts	Net Change in Unrealized Depreciation or Appreciation on Commodity Futures Contracts
Commodity price
Corn futures contracts	$(2,064,200)	$(969,000)
Soybean futures contracts	7,475	(210,300)
Sugar futures contracts	(2,266,185)	(57,994)
Wheat futures contracts