Ceres Classic Swings to Profit on Strong Q3 Trading Gains

TL;DR

**Ceres Classic's Q3 trading comeback is a glimmer of hope, but the ongoing capital outflows signal deeper investor concerns.**

AI Summary

Ceres Classic L.P. reported a significant turnaround in net income for the three months ended September 30, 2025, reaching $5,642,841, a substantial improvement from a net loss of $9,585,625 in the same period of 2024. This positive shift was primarily driven by strong trading results, with net gains on trading of commodity interests totaling $5,619,430, compared to a loss of $9,943,247 in the prior year. However, for the nine months ended September 30, 2025, the partnership still recorded a net loss of $3,659,754, albeit an improvement from the $8,857,304 net income in the corresponding 2024 period. Total assets decreased to $132,070,061 as of September 30, 2025, from $147,087,504 at December 31, 2024, reflecting a decline in equity in trading account from $146,682,179 to $131,744,070. Partners' capital also saw a reduction, falling from $145,640,538 to $130,864,104 over the same period, largely due to $11,116,680 in Limited Partner redemptions. Net unrealized appreciation on open futures contracts increased to $4,210,070 from $2,269,270, while net unrealized appreciation on open forward contracts decreased to $963,926 from $1,672,427.

Why It Matters

This filing reveals Ceres Classic L.P.'s ability to generate substantial trading gains in Q3 2025, a critical factor for investors in this speculative commodity pool. The significant reduction in partners' capital due to redemptions, totaling over $11 million, indicates potential investor skepticism or a shift in capital allocation, which could impact the fund's future trading capacity and fee generation for entities like Morgan Stanley Wealth Management. The competitive landscape for managed futures funds is intense, and consistent positive trading results are essential for attracting and retaining capital. Employees of the General Partner and Trading Advisors benefit from fees tied to assets under management and performance, making capital retention vital.

Risk Assessment

Risk Level: medium — The partnership's reliance on speculative trading of futures and forward contracts introduces inherent market volatility, as evidenced by the swing from a $9,585,625 net loss in Q3 2024 to a $5,642,841 net income in Q3 2025. The significant decrease in total partners' capital from $145,640,538 at December 31, 2024, to $130,864,104 at September 30, 2025, primarily due to $11,116,680 in Limited Partner redemptions, indicates a risk of declining assets under management, which could impact the fund's scale and profitability.

Analyst Insight

Investors should closely monitor future quarterly reports for sustained positive trading results and a stabilization or reversal of capital outflows. Given the volatile nature of commodity trading, a cautious approach is warranted, and potential investors should assess their risk tolerance against the fund's historical performance and fee structure, particularly the 0.75% annual ongoing placement agent fee for Class A units.

Financial Highlights

debt To Equity

0.01

revenue

N/A

operating Margin

N/A

total Assets

$132,070,061

total Debt

$0

net Income

$5,642,841

eps

$1.25

gross Margin

N/A

cash Position

$99,433,935

revenue Growth

N/A

Key Numbers

• $5,642,841 — Net income (loss) for three months ended September 30, 2025 (Significant turnaround from a net loss of $9,585,625 in Q3 2024.)
• $9,585,625 — Net income (loss) for three months ended September 30, 2024 (Net loss in the prior year's comparable quarter.)
• $132,070,061 — Total assets as of September 30, 2025 (Decreased from $147,087,504 at December 31, 2024.)
• $130,864,104 — Total partners' capital as of September 30, 2025 (Decreased from $145,640,538 at December 31, 2024.)
• $11,116,680 — Redemptions - Limited Partners for nine months ended September 30, 2025 (Significant capital outflow from the partnership.)
• $4,210,070 — Net unrealized appreciation on open futures contracts as of September 30, 2025 (Increased from $2,269,270 at December 31, 2024.)
• $963,926 — Net unrealized appreciation on open forward contracts as of September 30, 2025 (Decreased from $1,672,427 at December 31, 2024.)
• 4,460,960.367 — Limited Partners, Class A Units outstanding as of September 30, 2025 (Decreased from 4,849,003.081 units at December 31, 2024.)
• $1.25 — Net income (loss) per Class A Unit for three months ended September 30, 2025 (Positive return per unit compared to a loss of $1.89 in Q3 2024.)
• 0.75% — Annual rate of ongoing placement agent fee for Class A units (Fee paid to Morgan Stanley Wealth Management.)

Key Players & Entities

• Ceres Classic L.P. (company) — registrant and limited partnership
• Ceres Managed Futures LLC (company) — General Partner and commodity pool operator
• Morgan Stanley Capital Management LLC (company) — parent company of Ceres Managed Futures LLC
• Morgan Stanley (company) — ultimate owner of MSCM and publicly held company
• Morgan Stanley Wealth Management (company) — placement agent for the Partnership
• Graham Capital Management, L.P. (company) — commodity trading advisor
• Winton Capital Management Limited (company) — commodity trading advisor
• EMC Capital Advisors, LLC (company) — commodity trading advisor
• Campbell & Company, LP (company) — commodity trading advisor
• Morgan Stanley & Co. LLC (company) — commodity broker and counterparty for foreign currency forward contracts

FAQ

Risk Factors

• Volatility in Trading Account Values [medium — market]: The Partnership's equity in the trading account decreased from $146,682,179 as of December 31, 2024, to $131,744,070 as of September 30, 2025. This decline is influenced by net unrealized appreciation on open futures contracts ($4,210,070 as of Sept 30, 2025, up from $2,269,270) and a decrease in net unrealized appreciation on open forward contracts ($963,926 as of Sept 30, 2025, down from $1,672,427).
• Limited Partner Redemptions [medium — financial]: The partnership experienced $11,116,680 in Limited Partner redemptions during the nine months ended September 30, 2025. This outflow contributed to the decrease in total partners' capital from $145,640,538 to $130,864,104.
• Reliance on Trading Advisors [medium — operational]: As of September 30, 2025, all trading decisions were made by four external commodity trading advisors (Graham Capital Management, L.P., Winton Capital Management Limited, EMC Capital Advisors, LLC, and Campbell & Company, LP). The General Partner can add, remove, or replace these advisors without notice to limited partners, introducing potential operational risk.
• Commodity Futures Trading Commission (CFTC) Regulations [low — regulatory]: As a commodity pool operator, Ceres Managed Futures LLC is subject to CFTC regulations. While specific new regulatory risks are not detailed in this 10-Q, ongoing compliance with these regulations is a constant operational requirement.
• Nine-Month Net Loss Despite Quarterly Turnaround [medium — financial]: Despite a strong net income of $5,642,841 for the three months ended September 30, 2025, the partnership still incurred a net loss of $3,659,754 for the nine months ended September 30, 2025. This indicates that the positive quarterly performance did not fully offset earlier losses.

Industry Context

Ceres Classic L.P. operates within the managed futures industry, which involves speculative trading of futures contracts, options, and forward contracts across various asset classes like currencies, energy, and metals. This sector is characterized by its high volatility and reliance on skilled commodity trading advisors (CTAs) to navigate market fluctuations. The industry is subject to regulatory oversight from bodies like the CFTC.

Regulatory Implications

As a commodity pool operator, Ceres Classic L.P. and its general partner, Ceres Managed Futures LLC, are subject to regulations by the CFTC and the National Futures Association (NFA). While this filing doesn't highlight new regulatory changes, ongoing compliance with reporting, disclosure, and operational standards is crucial.

What Investors Should Do

1. Monitor Trading Advisor Performance
2. Assess Impact of Redemptions
3. Analyze Unrealized Gains/Losses
4. Evaluate Nine-Month Performance

Key Dates

• 2025-09-30: Quarterly Financial Statements — Reported a net income of $5,642,841, a significant turnaround from a net loss of $9,585,625 in the prior year's quarter, driven by trading gains.
• 2025-09-30: Total Assets — Decreased to $132,070,061 from $147,087,504 at year-end 2024, reflecting a reduction in the trading account equity.
• 2025-09-30: Total Partners' Capital — Decreased to $130,864,104 from $145,640,538 at year-end 2024, largely due to $11,116,680 in Limited Partner redemptions.
• 2024-09-30: Quarterly Financial Statements — Reported a net loss of $9,585,625 for the three months ended September 30, 2024.
• 2024-12-31: Year-End Financial Statements — Total assets were $147,087,504 and total partners' capital was $145,640,538.

Glossary

Equity in trading account

The total value of assets held within the partnership's trading operations, including cash, unrealized gains/losses on contracts, and receivables. (Represents the core investment capital managed by the partnership's trading advisors.)

Net unrealized appreciation

The increase in the value of open futures or forward contracts that have not yet been settled, based on current market prices. (Indicates the current paper gains or losses on open trading positions, impacting the partnership's net asset value.)

Limited Partner redemptions

The process by which limited partners withdraw their capital from the partnership. (A significant outflow of capital, impacting the total partners' capital and potentially the liquidity of the partnership.)

Commodity pool operator

An entity that operates or solicits funds for a commodity pool, which is an investment fund that trades commodity futures or options. (Ceres Managed Futures LLC acts as the commodity pool operator for Ceres Classic L.P., subjecting it to regulatory oversight.)

Placement agent

A firm that helps an investment fund raise capital by marketing its securities to potential investors. (Morgan Stanley Wealth Management acts as the placement agent for Class A units, earning a 0.75% annual fee.)

Net asset value per Unit

The total value of the partnership's assets minus its liabilities, divided by the number of outstanding units. (Measures the per-unit value of an investor's stake in the partnership.)

Year-Over-Year Comparison

Ceres Classic L.P. has shown a significant improvement in quarterly performance, with net income for Q3 2025 at $5,642,841 compared to a net loss of $9,585,625 in Q3 2024. However, total assets and partners' capital have declined year-over-year, from $147,087,504 and $145,640,538 respectively at December 31, 2024, to $132,070,061 and $130,864,104 at September 30, 2025. This reduction is partly due to $11,116,680 in Limited Partner redemptions, and while net unrealized appreciation on futures increased, it decreased on forward contracts.

Filing Documents

• d82883d10q.htm (10-Q) — 1315KB
• d82883dex311.htm (EX-31.1) — 11KB
• d82883dex312.htm (EX-31.2) — 11KB
• d82883dex321.htm (EX-32.1) — 4KB
• d82883dex322.htm (EX-32.2) — 4KB
• 0001193125-25-274012.txt ( ) — 5763KB
• ck0001066656-20250930.xsd (EX-101.SCH) — 668KB
• d82883d10q_htm.xml (XML) — 1321KB

FINANCIAL INFORMATION

PART I. FINANCIAL INFORMATION

Financial Statements

Item 1. Financial Statements . Ceres Classic L.P. Consolidated Statements of Financial Condition September 30, 2025 (Unaudited) December 31, 2024 Assets: Equity in trading account: Unrestricted cash $ 99,433,935 $ 116,041,683 Restricted cash 25,843,594 25,673,499 Foreign cash (cost $ 1,260,102 and $ 1,029,782 at September 30, 2025 and December 31, 2024, respectively) 1,292,545 1,025,300 Net unrealized appreciation on open futures contracts 4,210,070 2,269,270 Net unrealized appreciation on open forward contracts 963,926 1,672,427 Total equity in trading account 131,744,070 146,682,179 Interest receivable 325,991 405,325 Total assets $ 132,070,061 $ 147,087,504 Liabilities and Partners' Capital: Liabilities: Accrued expenses: Administrative and General Partner's fees $ 79,195 $ 88,886 Management fees 124,392 145,970 Professional fees 265,095 247,616 Redemptions payable to General Partner - 75,000 Redemptions payable to Limited Partners 737,275 889,494 Total liabilities 1,205,957 1,446,966 Partners' Capital: General Partner, Class Z, 119,150.531 Units outstanding at September 30, 2025 and December 31, 2024 1,511,032 1,540,021 Limited Partners, Class A, 4,460,960.367 and 4,849,003.081 Units outstanding at September 30, 2025 and December 31, 2024, respectively 129,212,563 143,957,312 Limited Partners, Class Z, 11,079.649 Units outstanding at September 30, 2025 and December 31, 2024 140,509 143,205 Total partners' capital (net asset value) 130,864,104 145,640,538 Total liabilities and partners' capital $ 132,070,061 $ 147,087,504 Net asset value per Unit: Class A $ 28.97 $ 29.69 Class Z $ 12.68 $ 12.93 See accompanying notes to consolidated financial statements. 1 Ceres Classic L.P. Consolidated Condensed Schedule of Investments September 30, 2025 (Unaudited) Notional ($)/ Number of Contracts Fair Value % of Partners' Capital Fu

Notes to Consolidated Financial Statements

Notes to Consolidated Financial Statements (Unaudited) 1. Organization: Ceres Classic L.P. (the "Partnership") is a Delaware limited partnership organized in 1998 to engage primarily in the speculative trading of futures contracts, options on futures and forward contracts, forward contracts on physical commodities and other commodity interests, including, but not limited to, foreign currencies, financial instruments, metals, energy and agricultural products (collectively, "Futures Interests") (refer to Note 4, "Financial Instrument Risks"). The General Partner (as defined below) may also determine to invest up to all of the Partnership's assets in United States ("U.S.") Treasury bills and/or money market mutual funds, including money market mutual funds managed by Morgan Stanley or its affiliates. Ceres Managed Futures LLC, a Delaware limited liability company, acts as the general partner ("Ceres" or the "General Partner") and commodity pool operator of the Partnership. The General Partner is a wholly-owned subsidiary of Morgan Stanley Capital Management LLC ("MSCM"). MSCM 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. Morgan Stanley Smith Barney LLC, doing business as Morgan Stanley Wealth Management ("Morgan Stanley Wealth Management"), currently acts as the placement agent for the Partnership. Morgan Stanley Wealth Management is a principal subsidiary of MSCM. As of September 30, 2025, all trading decisions were made for the Partnership by Graham Capital Management, L.P. ("Graham"), Winton Capital Management Limited ("WCM"), EMC Capital Advisors, LLC ("EMC") and Campbell & Company, LP ("Campbell"), as the commodity trading advisors to the Partnership (each, a "Trading Advisor" and collectively, the "Trading Advisors"). Each Trading Advisor is allocated a portion of the Partnership's assets

Notes to Consolidated Financial Statements

Notes to Consolidated Financial Statements (Unaudited) The ongoing placement agent fee paid by the Partnership to Morgan Stanley Wealth Management for Class A unit holders is equal to an annual rate of 0.75% of the adjusted net assets of Class A units (computed monthly by multiplying the adjusted net assets of the Class A units by 0.75% and dividing the result thereof by 12). The administrative and general partner fee paid by the Partnership to Ceres for all limited partners is equal to an annual rate of 0.75% of the Partnership's net assets (as defined in the Partnership's Limited Partnership Agreement). The Partnership directly pays the brokerage fees and other transaction-related fees and expenses, as incurred and also pays its ongoing administrative, operating, offering and organizational expenses (including, but not limited to, periodic legal, accounting, administrative, filing, reporting and data processing fees) and its pro rata share of such expenses of any trading company to which the Partnership has allocated assets. The Trading Company has entered into a foreign exchange brokerage account agreement and a futures brokerage account agreement with MS&Co. The Partnership has also entered into a futures brokerage account agreement with MS&Co. Pursuant to these agreements, the Partnership, directly or indirectly through its investment in the Trading Company, pays MS&Co. (or will reimburse MS&Co., if previously paid) its allocable share of all trading fees for the clearing and, where applicable, execution of transactions as well as exchange, user, give-up, floor brokerage and National Futures Association fees (collectively, the "clearing fees"). The Partnership has also entered into a selling agreement with Morgan Stanley Wealth Management (as amended, the "Selling Agreement"). Pursuant to the Selling Agreement, Morgan Stanley Wealth Management is paid a monthly ongoing placement agent fee at the rates described above. The ongoing placement agent fee rece

Notes to Consolidated Financial Statements

Notes to Consolidated Financial Statements (Unaudited) 2. Basis of Presentation and Summary of Significant Accounting Policies: The accompanying consolidated 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 September 30, 2025 and the results of its operations and changes in partners' capital for the three and nine months ended September 30, 2025 and 2024. These consolidated financial statements present the results of interim periods and do not include all of the disclosures normally provided in annual financial statements. These consolidated financial statements should be read together with the consolidated financial statements and notes included in the Partnership's Annual Report on Form 10-K (the "Form 10-K") filed with the Securities and Exchange Commission (the "SEC") for the year ended December 31, 2024. The December 31, 2024 information has been derived from the audited consolidated financial statements as of and for the year ended December 31, 2024. 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 consolidated 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 consolidated financial statements and accompanying notes. As a result, actual results could differ from these estimates, and those differences could be material. Profit Allocation. Except for class specific expen

Notes to Consolidated Financial Statements

Notes to Consolidated Financial Statements (Unaudited) Partnership's Cash . The cash held by the Partnership that is available for Futures Interests trading is on deposit in a commodity brokerage account with MS&Co. The Partnership'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. and/or JPM, as applicable. All of these amounts are maintained separately. At September 30, 2025 and December 31, 2024, the amount of cash held for margin requirements was $ 25,843,594 and $ 25,673,499 , respectively. Cash that is not classified as restricted cash is therefore classified as unrestricted cash. Restricted and unrestricted cash includes cash denominated in foreign currencies of $ 1,292,545 (cost of $ 1,260,102 ) and $ 1,025,300 (cost of $ 1,029,782 ) as of September 30, 2025 and December 31, 2024, respectively. Income Taxes. Income taxes have not been recorded as each partner is individually liable for the taxes, if any, on its share of the Partnership's income and expenses. The Partnership follows the guidance of ASC 740, "Income Taxes," which prescribes a recognition threshold and measurement attribute for financial statement recognition and measurement of tax positions taken or expected to be taken in the course of preparing the Partnership's tax returns to determine whether the tax positions are "more-likely-than-not" of being sustained "when challenged" or "when examined" by the applicable tax authority. Tax positions determined not to meet the more-likely-than-not threshold would be recorded as a tax benefit or liability in the Consolidated 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 Partnership's Consolidated Statements of Income a

Notes to Consolidated Financial Statements

Notes to Consolidated Financial Statements (Unaudited) 3. Financial Highlights: Financial highlights for the limited partner class as a whole for the three and nine months ended September 30, 2025 and 2024 were as follows: Three Months Ended September 30, Nine Months Ended September 30, 2025 2024 2025 2024 Class A Class Z Class A Class Z Class A Class Z Class A Class Z Per Unit Performance (for a unit outstanding throughout the period):* Net realized and unrealized gains (losses) $ 1.25 $ 0.54 $ ( 1.96 ) $ ( 0.85 ) $ ( 0.75 ) $ ( 0.33 ) $ 1.60 $ 0.69 Net investment income - 0.02 0.07 0.06 0.03 0.08 0.03 0.09 Increase (decrease) for the period 1.25 0.

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