Table of Contents

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

 

 

FORM 10-Q

 

 

 

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

For the quarterly period ended June 30, 2010

or

 

¨	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from                  to                 

Commission File number: 000-51836

 

 

ROGERS INTERNATIONAL RAW MATERIALS FUND, L.P.

(Exact name of registrant as specified in charter)

 

 

 

Illinois		36-4368292
(State of Organization)		(IRS Employer Identification Number)
c/o Beeland Management Company, L.L.C. General Partner 141 West Jackson Boulevard Suite 1340A Chicago, Illinois		60604
(Address of principal executive offices)		(Zip Code)

(312) 264-4375

(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, and (2) has been subject to such filing requirements for the past 90 days.    Yes  x     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, or a non-accelerated filer. See definition of “accelerated filer and large accelerated filer” in Rule 12b-2 of the Exchange Act.

 

Large accelerated filer		¨		Accelerated Filer		¨
Non-accelerated filer		¨		Smaller Reporting Company		x

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    Yes  ¨    No  x

 

 

 

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Table of Contents

PART I - FINANCIAL INFORMATION

 

ITEM 1.

FINANCIAL STATEMENTS

The following financial statements of Rogers International Raw Materials Fund, L.P. are included in Item 1:

 

		Page
Financial Statements
Statements of Financial Condition as of June 30, 2010 (unaudited) and December 31, 2009 (audited)		3
Condensed Schedules of Investments as of June 30, 2010 (unaudited) and December 31, 2009 (audited)		4-5
Statements of Operations for the Three and Six Months Ended June 30, 2010 and June  30, 2009 (unaudited)		6
Statements of Changes in Partners’ Capital for the Six Months Ended June 30, 2010 and June  30, 2009 (unaudited)		7
Financial Highlights for the Three and Six Months Ended June 30, 2010 and June  30, 2009 (unaudited)		8
Notes to Financial Statements (unaudited)		9-16

 

 

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Rogers International Raw Materials Fund, L.P.

Statements of Financial Condition as of June 30, 2010 (Unaudited) and December 31, 2009 (Audited)

 

 

		June 30, 2010				December 31, 2009
ASSETS
Equity in brokers trading accounts:
Cash at brokers		$	32,884,445			$	52,645,601
Unrealized gain (loss) on open futures contracts, net			(671,990	)			1,415,031
Total equity in brokers trading accounts			32,212,455				54,060,632
Cash and cash equivalents			11,024,803				325,805
Interest receivable			213				191
Total assets		$	43,237,471			$	54,386,628
LIABILITIES
Brokerage commissions payable		$	6,030			$	6,642
Accrued management fees – General Partner			35,657				44,256
Administrative fees and other payables			259,896				442,394
Withdrawals payable			669,946				1,816,700
Total liabilities			971,529				2,309,992
PARTNERS’ CAPITAL
Partners’ capital (net assets)			42,265,942				52,076,636
Total liabilities and partners’ capital		$	43,237,471			$	54,386,628

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

 

 

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Rogers International Raw Materials Fund, L.P.

Condensed Schedule of Investments as of June 30, 2010 (Unaudited)

 

 

		Unrealized Gain (Loss) on Open Long Contracts				Percent of Partners’ Capital
Futures contracts*:
U.S. Futures Positions
Agricultural		$	204,895			0.49	%
Metals			(4,950	)		(0.01	)
Energy			13,569			0.03
Total U.S. Futures Positions			213,514			0.51
Foreign Futures Positions
Agricultural			30,239			0.07
Metals			(915,743	)		(2.17	)
Total Foreign Futures Positions			(885,504	)		(2.10	)
Total Futures Contracts		$	(671,990	)		(1.59	)%

 

*	No individual futures contract position constitutes greater than 1 percent of Partners’ Capital. Accordingly, the number of contracts and expiration dates are not presented.

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

 

 

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Rogers International Raw Materials Fund, L.P.

Condensed Schedule of Investments as of December 31, 2009 (Audited)

 

 

		Unrealized Gain (Loss) on Open Long Contracts			Percent of Partners’ Capital
Futures contracts*:
U.S. Futures Positions
Agricultural		$	363,681		0.70	%
Metals			64,885		0.13
Energy			101,053		0.19
Total U.S. Futures Positions			529,619		1.02
Foreign Futures Positions
Agricultural			21,606		0.04
Metals			863,806		1.66
Total Foreign Futures Positions			885,412		1.70
Total Futures Contracts		$	1,415,031		2.72	%

 

*	No individual futures contract position constitutes greater than 1 percent of Partners’ Capital. Accordingly, the number of contracts and expiration dates are not presented.

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

 

 

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Rogers International Raw Materials Fund, L.P.

Statements of Operations for the Three and Six Months Ended June 30, 2010 and June 30, 2009 (Unaudited)

 

 

		3 months ended June  30, 2010				3 months ended June  30, 2009				6 months ended June  30, 2010				6 months ended June 30, 2009
Net trading gains (losses):
Realized		$	(1,927,001	)		$	10,155,727			$	(2,865,682	)		$	5,586,454
Change in unrealized			(1,740,869	)			(2,711,641	)			(2,087,021	)			(312,831	)
Commissions			(26,215	)			(32,754	)			(54,943	)			(68,682	)
			(3,694,085	)			7,411,332				(5,007,646	)			5,204,941
Investment income:
Interest income			16,651				36,855				26,890				163,774
Other income			282,650				560,214				282,650				560,214
			299,301				597,069				309,540				723,988
Expenses:
Management fees – General Partner			116,069				115,698				239,684				226,292
Administrative fees and other expenses			197,993				203,181				408,253				401,226
			314,062				318,879				647,937				627,518
Net investment gain (loss)			(14,761	)			278,190				(338,397	)			96,470
Net income (loss)		$	(3,708,846	)		$	7,689,522			$	(5,346,043	)		$	5,301,411
Net increase (decrease) in NAV per GP and LP unit:		$	(12.53	)		$	22.02			$	(17.57	)		$	15.39
General Partner		$	(12.53	)		$	22.02			$	(17.57	)		$	15.39
Limited Partners		$	(12.53	)		$	22.02			$	(17.57	)		$	15.39
Net income (loss) per General and Limited Partners (based on weighted average number of units outstanding during the period):
General Partner		$	(50,571	)		$	88,903			$	(70,898	)		$	62,138
Limited Partners			(3,658,275	)			7,600,619				(5,275,145	)			5,239,273
		$	(3,708,846	)		$	7,689,522			$	(5,346,043	)		$	5,301,411

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

 

 

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Rogers International Raw Materials Fund, L.P.

Statements of Changes in Partners’ Capital for the Six Months Ended June 30, 2010 and June 30, 2009 (Unaudited)

 

 

		Number of Units			Limited Partners				Number of Units		General Partner				Total
Partners’ capital (net assets), December 31, 2009		314,149			$	51,416,343			4,034		$	660,293			$	52,076,636
Contributions		—				—			—			—				—
Net loss		—				(5,275,145	)		—			(70,898	)			(5,346,043	)
Withdrawals		(28,879	)			(4,464,651	)		—			—				(4,464,651	)
Partners’ capital (net assets), June 30, 2010		285,270			$	41,676,547			4,034		$	589,395			$	42,265,942
		Number of Units			Limited Partners				Number of Units		General Partner				Total
Partners’ capital (net assets), December 31, 2008		354,252			$	46,388,210			4,038		$	528,802			$	46,917,012
Contributions		—				—			—			—				—
Net income		—				5,239,273			—			62,138				5,301,411
Withdrawals		(12,205	)			(1,573,899	)		—			—				(1,573,899	)
Partners’ capital (net assets), June 30, 2009		346,707			$	50,053,584			4,038		$	590,940			$	50,644,524

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

 

 

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Rogers International Raw Materials Fund, L.P.

Financial Highlights for the Three and Six Months Ended June 30, 2010 and June 30, 2009 (Unaudited)

 

Per Unit Performance

 

		3 months ended June 30, 2010				3 months ended June 30, 2009				6 months ended June 30, 2010				6 months ended June 30, 2009
Net asset value per unit at the beginning of the period		$	158.63			$	124.32			$	163.67			$	130.95
Income (loss) from operations:
Net trading gains (losses)			(12.48	)			21.23				(16.46	)			15.12
Investment income:
Total investment income			1.01				1.71				1.02				2.06
Expenses:
Total expenses			(1.06	)			(0.92	)			(2.13	)			(1.79	)
Net investment gain (loss)			(0.05	)			0.79				(1.11	)			0.27
Net income (loss) per unit			(12.53	)			22.02				(17.57	)			15.39
Net asset value per unit at the end of the period		$	146.10			$	146.34			$	146.10			$	146.34
		3 months ended June 30, 2010				3 months ended June 30, 2009				6 months ended June 30, 2010				6 months ended June 30, 2009
Ratio of net investment gain (loss) to average partners’ capital (net assets)(2)			-0.03	%			0.59	%			-0.72	%			0.21	%
Ratio of expenses to average partners’ capital (net assets) (1)  (2)			0.69	%			0.67	%			1.37	%			1.36	%
Total return (2)			-7.90	%			17.71	%			-10.74	%			11.75	%

The above ratios were calculated for the partners taken as a whole. The computation of such ratios was not based on the amount of expenses assessed and income allocated to an individual partner’s capital account, which may vary from these ratios based on the timing of capital transactions (see Note 5).

 

( 1)	The ratio of expenses to average partners’ capital (net asset) values does not include brokerage commissions.

 

(2)	Not annualized.

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

 

 

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Rogers International Raw Materials Fund, L.P.

Notes to the Financial Statements (unaudited)

 

 

Note 1.

Significant Accounting Policies:

Nature of Business and Organization: Rogers International Raw Materials Fund, L.P. (the “Partnership”) is an Illinois Limited Partnership that was established in May 2000. The Partnership trades a portfolio primarily of commodity futures and forward contracts, principally on recognized exchanges. The Partnership may also purchase contracts in the over the counter marketplace under certain circumstances. The Partnership invests and trades exclusively on the “long side” of the market. The Partnership’s investment strategy is designed to replicate the Rogers International Commodity Index ^® (the “Index”) and positions are rebalanced monthly to maintain the Index’s relative weightings. The Partnership commenced trading during November 2001. The Partnership’s General Partner and commodity pool operator is Beeland Management Company, L.L.C. (the “General Partner”).

Net Assets: The valuation of net assets includes open commodity futures, swap, and forward contracts owned by the Partnership, if any, at the end of the period. The unrealized gain or loss on these contracts has been calculated based on closing prices on the last business day of each month. Net asset value is determined by subtracting liabilities from assets, which also equals partners’ capital.

Cash and Cash Equivalents: Cash and cash equivalents include highly liquid instruments with original maturities of three months or less at the date of acquisition. Cash and cash equivalents represent amounts on deposit with a broker to facilitate payment of expenses and partner withdrawals.

Profit and Loss Allocation: Limited partners and the General Partner share in the profits and losses of the Partnership in the proportion that each partner’s capital account bears to total partners’ capital.

Income Taxes: No provision for income taxes has been made in these financial statements as each partner is individually responsible for reporting income or loss based on its respective share of the Partnership’s income and expenses as reported for income tax purposes.

The Partnership follows the provisions of Financial Accounting Standards Board Accounting Standards Codification (“FASB ASC”) Topic 740, Income Taxes. The Partnership is generally not subject to examination by U.S. federal or state taxing authorities for tax years before 2006. As of June 30, 2010 and December 31, 2009, the Partnership has no material uncertain tax positions, and accordingly, has not recorded a liability for the payment of interest or penalties.

Fair Value of Financial Instruments: Securities and derivative financial instruments are recorded at fair value.

Statement of Cash Flows: The Partnership has elected not to present a statement of cash flows as permitted by FASB ASC 230-10.

Revenue Recognition: Futures and forward contracts are recorded on a trade date basis and realized gains or losses are recognized when contracts are liquidated. Unrealized gains or losses on open contracts (the difference between contract trade price and market price) are reported in the statement of financial condition as a net unrealized gain or loss, as there exists a right of offset of unrealized gains or losses in accordance with FASB ASC 210-20, Balance Sheet, Offsetting. Any change in net unrealized gain or loss from the preceding period is reported in the statement of operations. Fair value of exchange-traded contracts is based upon exchange settlement prices. U.S. Government securities are stated at cost plus accrued interest, which approximates fair value based on quoted prices for identical assets in an active market.

Interest Income Recognition: The Partnership records interest income on the accrual basis.

 

 

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Rogers International Raw Materials Fund, L.P.

Notes to the Financial Statements (unaudited)

 

 

Note 1.

Significant Accounting Policies (Continued):

 

Use of Estimates: The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates.

Foreign Currency Translation: Foreign currency is translated into U.S. dollars at the exchange rate published by the carrying broker on the last business day of each month. The Partnership does not isolate that portion of the results of operations resulting from changes in foreign exchange rates on investments from the fluctuations arising from changes in market prices of securities held. Such fluctuations are included with the net realized trading gains or losses.

Ongoing Offering Expenses: Ongoing offering expenses are accrued on an ongoing basis and charged to expense as incurred.

Deposits with Brokers: The Partnership deposits assets with brokers subject to Commodity Futures Trading Commission regulations and various exchange and broker requirements. Margin requirements are satisfied by the deposit of cash with such brokers. The Partnership earns interest income on its assets deposited with the brokers.

Withdrawals Payable: Pursuant to the provisions of FASB ASC 480, Distinguishing Liabilities from Equity, redemptions approved by the General Partner prior to month end with a fixed effective date and fixed amount are recorded as withdrawals payable as of month end (see Note 5).

 

 

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Rogers International Raw Materials Fund, L.P.

Notes to the Financial Statements (unaudited)

 

 

Note 2.

Fair Value Measurements:

The Partnership follows the provisions of FASB ASC 820, Fair Value Measurements and Disclosures. FASB ASC 820 defines fair value, establishes a framework for measuring fair value, requires disclosures about fair value measurement, and emphasizes that fair value is a market-based measurement, not an entity-specific measurement. FASB ASC 820 defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date and sets out a fair value hierarchy. The fair value hierarchy gives the highest priority to quoted prices in active markets for identical assets or liabilities (Level 1) and the lowest priority to unobservable inputs (Level 3). Inputs are broadly defined under FASB ASC 820 as assumptions market participants would use in pricing an asset or liability. The three levels of the fair value hierarchy under FASB ASC 820 are described below:

Level 1. Unadjusted quoted prices in active markets for identical assets or liabilities that the reporting entity has the ability to access at the measurement date.

Level 2. Inputs other than quoted prices within Level 1 that are observable for the asset or liability, either directly or indirectly; and fair value is determined through the use of models or other valuation methodologies. A significant adjustment to a Level 2 input could result in the Level 2 measurement becoming a Level 3 measurement.

Level 3. Inputs are unobservable for the asset or liability and include situations where there is little, if any, market activity for the asset or liability. The inputs into the determination of fair value are based upon the best information in the circumstances and may require significant management judgment or estimation.

In certain cases, the inputs used to measure fair value may fall into different levels of the fair value hierarchy. In such cases, an investment’s level within the fair value hierarchy is based on the lowest level of input that is significant to the fair value measurement. The Partnership’s assessment of the significance of a particular input to the fair value measurement in its entirety requires judgment, and considers factors specific to the investment. The following section describes the valuation techniques used by the Partnership to measure different financial instruments at fair value and includes the level within the fair value hierarchy in which the financial instrument is categorized. The fair values of exchange traded futures contracts are based upon exchange settlement prices. Money market funds are valued using quoted market prices. These financial instruments are classified as Level 1 of the fair value hierarchy.

The fair values of exchange traded futures contracts are based upon exchange settlement prices. Money market funds are valued using quoted market prices. These financial instruments are classified as Level 1 of the fair value hierarchy.

 

 

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Rogers International Raw Materials Fund, L.P.

Notes to the Financial Statements (unaudited)

 

 

Note 2.

Fair Value Measurements (Continued):

 

The following table summarizes the Partnership’s assets measured at fair value on a recurring basis as of June 30, 2010 and December 31, 2009 using the fair value hierarchy:

 

Description		June 30, 2010 Level 1				December 31, 2009 Level 1
Equity in brokers trading accounts:
Unrealized gain (loss) on open futures contracts, net		$	(671,990	)		$	1,415,031
Cash at brokers:
Money market funds			26,003,803				40,848,978
Total assets at fair value		$	25,331,813			$	42,264,009

At June 30, 2010 and December 31, 2009 there are no Level 2 or Level 3 assets or liabilities.

In addition, substantially all of the Partnership’s other assets and liabilities are considered financial instruments and are reflected at fair value, or at carrying amounts that approximate fair value because of the short maturity of the instruments.

 

Note 3.

Derivative Transactions

The Partnership’s business is speculative trading of futures and forward contracts. The Partnership does not designate any derivative instruments as hedging instruments under FASB ASC 815-10-05. The following tables summarize the quantitative information required by FASB ASC 815:

 

		Asset Derivatives June 30, 2010 Fair Value			Liability Derivatives June 30, 2010 Fair Value				Net Derivatives June 30, 2010 Fair Value*
Agricultural		$	414,906		$	(179,772	)		$	235,134
Metals			61,498			(982,191	)			(920,693	)
Energy			89,155			(75,586	)			13,569
Totals		$	565,559		$	(1,237,549	)		$	(671,990	)

 

*	The net fair value of all asset and liability derivative is included in equity in brokers trading accounts in the statements of financial condition.

 

 

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Rogers International Raw Materials Fund, L.P.

Notes to the Financial Statements (unaudited)

 

 

Note 3.

Derivative Transactions (Continued):

 

		Asset Derivatives December 31, 2009 Fair Value			Liability Derivatives December 31, 2009 Fair Value				Net Derivatives December 31, 2009 Fair Value*
Agricultural		$	520,455		$	(135,168	)		$	385,287
Metals			1,007,771			(79,081	)			928,690
Energy			143,290			(42,236	)			101,054
Totals		$	1,671,516		$	(256,485	)		$	1,415,031

 

*	The net fair value of all asset and liability derivative is included in equity in broker trading accounts in the statements of financial condition.

Trading revenue for the three and six months ended June 30, 2010 and 2009:

 

Type of Contract		3 months ended June 30, 2010				3 months ended June 30, 2009				6 months ended June 30, 2010				6 months ended June 30, 2009
Agricultural		$	(299,858	)		$	327,789			$	(2,085,574	)		$	(541,512	)
Metals			(1,050,462	)			1,562,987				(721,534	)			2,349,119
Energy			(2,317,550	)			5,553,310				(2,145,595	)			3,466,016
		$	(3,667,870	)		$	7,444,086			$	(4,952,703	)		$	5,273,623
		3 months ended June 30, 2010				3 months ended June 30, 2009				6 months ended June 30, 2010				6 months ended June 30, 2009
Line Item in Statements of Operations
Realized		$	(1,927,001	)		$	10,155,727			$	(2,865,682	)		$	5,586,454
Change in unrealized			(1,740,869	)			(2,711,641	)			(2,087,021	)			(312,831	)
		$	(3,667,870	)		$	7,444,086			$	(4,952,703	)		$	5,273,623

For the three and sixth months ended, June 30, 2010 and 2009, the monthly average of contracts bought and sold was 1,385, 1,492, 1,801, and 1,937, respectively.

 

Note 4.

Agreements and Related-Party Transactions:

The Limited Partnership Agreement vests all responsibility and powers for the management of the business and affairs of the Partnership with the General Partner, Beeland Management Company, L.L.C., including trading decisions.

The Partnership pays a monthly management fee to the General Partner equal to 0.08333% of the net assets of the Fund at the close of the preceding month (1.00% per annum).

 

 

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Rogers International Raw Materials Fund, L.P.

Notes to the Financial Statements (unaudited)

 

 

Note 4.

Agreements and Related-Party Transactions (continued):

 

The Partnership is responsible for the administrative expenses and trading expenses related to its operations. The General Partner may incur certain expenses on behalf of the Partnership and charge the Partnership for its allocable portion of these expenses.

Uhlmann Price Securities L.L.C. (“Uhlmann”), a party related to the General Partner by reason of common management, acts as the selling group manager for the Partnership. The Partnership pays Uhlmann a share of selling fees when units are sold by its registered brokers. Selling fees of up to 5% of the gross offering proceeds (which includes a 3.75% reallowance to other broker dealers and a 0.5% wholesaling fee retained by the General Partner) are charged to partners’ capital upon issuance of partnership units. Uhlmann did not receive any selling commissions during the periods ended June 30, 2010 and 2009 because no units were sold during those periods.

In addition, there is an annual trailing servicing fee of up to 1% of the net asset value of the specific partner’s capital account payable to the soliciting broker-dealer for ongoing investor services.

The Price Futures Group, Inc. (“PFG”), a related party to the General Partner through common management, acts as the introducing broker for the Partnership, whereby certain accounts of the Partnership are introduced to the Partnership’s clearing broker. A portion of the brokerage fee paid by the Partnership for clearing transactions is paid to PFG, by the clearing broker.

Fund Dynamics, LLC, an affiliate of the General Partner through common management, acts as the Partnership’s administrator. Fund Dynamics, LLC calculates both the daily and monthly Net Asset Value (“NAV”), prepares the monthly accounting package, and prepares monthly investor statements.

A summary of fees charged by related parties to the Partnership is as follows:

 

		3 months ended June 30, 2010			3 months ended June 30, 2009			6 months ended June 30, 2010			6 months ended June 30, 2009
Management fees – General Partner		$	116,069		$	115,698		$	239,684		$	226,292
Administrative fees – Fund Dynamics			27,796			29,065			57,205			57,591
Trailing servicing fees – Uhlmann			75,861			76,878			156,925			150,290

 

Note 5.

Partnership Capital and Withdrawals:

The Partnership accepts contributions as of the close of business on the last business day of each month for investment on the first day of the next succeeding month. The General Partner may accept or reject contributions and waive the minimum contribution amounts in its sole discretion. At June 30, 2010, the Partnership was not accepting contributions from new or existing investors.

The purchase price of a unit is the net asset value per unit as of the end of each calendar month. Net asset value per unit is calculated as the net asset value at month-end divided by the number of outstanding units.

The Partnership accepts redemptions on a monthly basis. Requests for redemption should be received by the General Partner no later than six business days prior to the end of the month in which an investor chooses to redeem. Requests for redemption should be sent to the General Partner by email, fax, or overnight courier.

 

 

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Rogers International Raw Materials Fund, L.P.

Notes to the Financial Statements (unaudited)

 

 

Note 6.

Financial Instruments with Off-Balance Sheet Credit and Market Risk:

The Partnership is involved in trading activities that may have market and/or credit risk. Financial instruments employed in the Partnership’s operations may have market and/or credit risk in excess of the amounts recorded in the statement of financial condition.

Market Risk - Market risks arise from changes in the market value of financial instruments. Theoretically, the Partnership’s exposure is equal to the notional contract value of futures contracts entered. Exposure to market risk is influenced by a number of factors, including the relationships between financial instruments, and the volatility and liquidity in the markets in which the financial instruments are traded. The use of financial instruments may serve to modify or offset market risk associated with other transactions.

Credit Risk - Credit risk arises primarily from the potential inability of counterparties to perform in accordance with the terms of a contract. The Partnership’s exposure to credit risk associated with counterparty nonperformance is generally the net unrealized gain on the open positions plus the value of the margin or collateral held by the counterparty. Exchange-traded financial instruments generally do not give rise to significant counterparty exposure due to the cash settlement procedures for daily market movements and the margin requirements of individual exchanges. Financial instruments traded off-exchange give rise to the risk of the failure of, or the inability or refusal to perform by, the counterparties to such trades.

Concentration of Credit Risk - The Partnership clears all of its futures trades through one clearing broker, MF Global, Inc. In the event this counterparty does not fulfill its obligations, the Partnership may be exposed to risk. This risk of default depends on the creditworthiness of the counterparties to these transactions.

The Partnership has a substantial portion of its assets on deposit with financial institutions in connection with its cash management activities. In the event of a financial institution’s insolvency, recovery of the Partnership’s assets on deposit may be limited to the amount of insurance or other protection afforded such deposits.

The Partnership attempts to minimize this credit risk by monitoring the creditworthiness of the clearing broker and financial institutions.

The unrealized net trading gains (losses) on open futures contracts is comprised of the following:

 

		June 30, 2010				December 31, 2009
Gross unrealized gains		$	565,559			$	1,671,516
Gross unrealized losses			(1,237,549	)			(256,485	)
Net unrealized trading gains (losses)		$	(671,990	)		$	1,415,031

 

Note 7.

Litigation Proceedings and Loss Contingency:

The Partnership is a party to, or beneficiary of, certain settlements with Refco Inc. and/or its affiliates, Refco Capital Markets, Ltd. and Refco LLC, as well as a Litigation Trust which is seeking recoveries from third parties, related to the 2005 bankruptcy of Refco Inc. and numerous of its affiliates (the “Refco Bankruptcy”) and Partnership claims in the Refco Bankruptcy. As of June 30, 2010, the Partnership has received the full value of its allowed claims in the Refco Bankruptcy as well as excess recoveries of approximately $2.6 million. The Partnership may receive additional Refco Bankruptcy related recoveries, although there can be no assurance that it will or that any additional recoveries will be material, and management is unable to estimate the amounts of any such additional recoveries.

 

 

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Rogers International Raw Materials Fund, L.P.

Notes to the Financial Statements (unaudited)

 

 

Note 7.

Litigation Proceedings and Loss Contingency (Continued):

 

All Refco Bankruptcy related recoveries received by the Partnership, including excess recoveries except as described below, have been allocated among all partners in the Partnership who were partners as of October 31, 2005, on a pro-rata basis as of October 31, 2005, with redeemed partners receiving cash distributions. Cash distributions to redeemed partners from excess recoveries totaled approximately $231,000 and $636,000 for the six months ended June 30, 2010 and year ended December 31, 2009, respectively. At June 30, 2010 approximately $285,000 of undistributed Refco related recoveries is included in redemptions payable on the statement of financial condition. Pursuant to Section 12.2 of the Partnership’s Agreement of Limited Partnership, the Partnership has reimbursed the General Partner approximately $400,000 from excess recoveries for legal costs incurred by the General Partner defending against suits related to the Refco Bankruptcy in 2009.

The Partnership has reserved $30,000 of the excess Refco related recoveries to apply to expenses incurred to administer ongoing communications with, and distributions and reporting to, redeemed limited partners with respect to Refco related recoveries received by and to be received by the Partnership. These expenses include but are not limited to professional fees, printing, postage, and administration fees. At June 30, 2010, $29,530 of these expenses is included in administrative and other fees payable on the statement of financial condition.

 

Note 8.

Indemnifications:

In the normal course of business, the Partnership enters into contracts and agreements that contain a variety of representations and warranties, both of which provide general indemnifications. The Partnership’s maximum exposure under these arrangements is unknown, as this would involve future claims that may be made against the Partnership that have not yet occurred. The Partnership expects the risk of any future obligation under these indemnifications to be remote.

 

Note 9.

Interim Financial Statements:

The statements of financial condition, including the condensed schedule of investments, as of June 30, 2010, the statement of operations for the three and six months ended June 30, 2010 and 2009 and changes in partners’ capital (net assets) for the six months ended June 30, 2010 and 2009 and the accompanying notes to the financial statements are unaudited. Certain information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles may be omitted pursuant to such rules and regulations. In the opinion of the General Partner, such financial statements and accompanying disclosures reflect all adjustments, which were of a normal and recurring nature, necessary for a fair presentation of the financial position as of June 30, 2010, results of operations for the three and six months ended June 30, 2010 and 2009 and changes in partner’s capital (net assets) for the six months ended June 30, 2010 and 2009. The results of operation for three and six months ended June 30, 2010 and 2009 are not necessarily indicative of the results to be expected for the full year or any other period. These financial statements should be read in conjunction with the audited financial statements and the notes thereto included in the Partnership’s Form 10-K as filed with the SEC.

 

Note 10.

Subsequent Events:

Subsequent to June 30, 2010, redemptions totaled $998,281 and there were no subscriptions.

Management of the Partnership evaluated subsequent events through the date these financial statements were issued. There are no additional subsequent events to disclose.

 

 

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ITEM 2.

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

INTRODUCTION

The Partnership’s principle objective is to provide an alternative investment vehicle for investors with diversified investment portfolios. The Partnership’s trading is designed to replicate the positions which comprise the Rogers International Commodity Index. The Partnership invests and trades in a portfolio of commodity futures and forward contracts. The Partnership invests and trades solely on the “long side” of the market. The General Partner (“Beeland Management”) manages all business of the Partnership.

CAPITAL RESOURCES

The Partnership will raise additional capital only through the sale of Units offered pursuant to a continuing offering, although at June 30, 2010, the Partnership was not offering its Units, and does not intend to raise any capital through borrowing. Due to the nature of the Partnership’s business, it will make no capital expenditures and will have no capital assets which are not operating capital or assets.

LIQUIDITY

Most United States commodity exchanges limit fluctuations in futures contracts prices during a single day by regulations referred to as “daily price fluctuation limits” or “daily limits.” During a single trading day, no trades may be executed at prices beyond the daily limit. This may affect the Partnership’s ability to initiate new positions or close existing ones or may prevent it from having orders executed. Futures prices have occasionally moved the daily limit for several consecutive days with little or no trading. Similar occurrences could prevent the Partnership from promptly liquidating unfavorable positions and subject the Partnership to substantial losses, which could exceed the margin initially committed to such trades. In addition, even if futures prices have not moved the daily limit, the Partnership may not be able to execute futures trades at favorable prices if little trading in such contracts is taking place.

Trading in forward or other over the counter contracts introduces a possible further impact on liquidity. Because such contracts are executed “off exchange” between private parties, the time required to offset or “unwind” these positions may be greater than that for exchange-traded instruments.

Other than these limitations on liquidity, which are inherent in the Partnership’s trading operations, the Partnership’s assets are expected to be highly liquid.

RESULTS OF OPERATIONS

The Partnership’s net income or loss is directly related to changes in the value of the Index, which the Partnership is designed to replicate, and is not dependent on trading decisions made by the Beeland Management apart from balancing positions to track the Index. In periods of general market inflation, Beeland Management would expect the value of the Index to increase; similarly, in periods of general market deflation, Beeland Management would expect the value of the Index to decrease. The Partnership’s performance may be negative in years when the Index’s performance is positive due to fees charged.

The components of the Partnership’s return are normally the gains and losses recognized from the changes in futures market prices and the interest income earned on cash balances. The mechanics and rules of futures markets allow the Partnership to earn interest on approximately 90% to 100% of its assets.

At June 30, 2010 and 2009, the Partnership’s net assets were $42,265,942 and $50,644,524, respectively.

 

 

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Net Revenues		3 months ended June 30, 2010				3 months ended June 30, 2009				6 months ended June 30, 2010				6 months ended June 30, 2009
Realized net trading gains		$	(1,927,001	)		$	10,155,727			$	(2,865,682	)		$	5,586,454
Unrealized trading gains (losses)			(1,740,869	)			(2,711,641	)			(2,087,021	)			(312,831	)
Investment income			299,301				597,069				309,540				723,988
Commissions			(26,215	)			(32,754	)			(54,943	)			(68,682	)
Total Net Revenues		$	(3,394,784	)		$	8,008,401			$	(4,698,106	)		$	5,928,929
Operating Expenses		3 months ended June 30, 2010				3 months ended June 30, 2009				6 months ended June 30, 2010				6 months ended June 30, 2009
Management fees		$	116,069			$	115,698			$	239,684			$	226,292
Administrative fees			197,993				203,181				408,253				401,226
Total Operating Expenses			314,062				318,879				647,937				627,518
Net Income (Loss)		$	(3,708,846	)		$	7,689,522			$	(5,346,043	)		$	5,301,411

The Partnership pays various fees and expenses on a continuing basis which include management fees, servicing fees, and brokerage commission and transaction fees.

Results of Operations

2010

Units of the Partnership posted a net loss of -8.22% in January. Performance for the index’s sectors was negative. The energy, agriculture, and metals sectors posted losses of -3.96%, -2.76%, and -1.42%, respectively. Highest grossing commodities for the Partnership’s performance in January were sugar, orange juice, lumber, azuki beans, and greasy wool.

Units of the Partnership posted a net gain of 5.17% in February. The energy, agriculture, and metals sectors posted gains of 3.12%, 1.42%, and 0.84%, respectively. The top performing commodities for the Partnership were cotton, nickel, crude oil, soybean oil and RBOB gasoline.

Units of the Partnership posted a net loss of 0.41% in March. Sector performance was mixed for March, the energy and metals sectors posted gains of 1.53% and 1.31%, respectively, while the agriculture sector posted a loss of -2.17%. Highest grossing commodities for March were crude oil, brent oil, aluminum, copper, and nickel. Overall, the Partnership posted a net loss of -3.08% for the quarter ended March 31, 2010.

Units of the Partnership posted a net gain of 2.54% in April. Sector performance was positive for April and the energy, agriculture, and metal sectors posted gains of 1.51%, 1.11%, and 0.16%, respectively. The top performing commodities for the Fund were palladium, soybean meal, KC wheat, wheat, and cocoa. The highest grossing commodities for April were brent oil, crude oil, wheat, corn, and gold.

Units of the Partnership posted a net loss of -9.89% in May. The performance of the all sectors of the Index’s was negative. The energy, agriculture, and metal sectors posted losses of -6.55%, -2.06%, and -1.72%, respectively. The top performing commodities for the Fund were natural gas, orange juice, gold, euro rapeseed, and greasy wool. The highest grossing commodities for May were natural gas, gold, orange juice, euro rapeseed, and greasy wool.

 

 

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Units of the Partnership posted a net loss of -0.33% in June. The performance of the Index’s sectors was mixed. The agriculture and energy sectors posted gains of 0.39% and 0.30%, respectively, while the metals sector posted a loss of -0.69%. The top performing commodities for the Partnership were oats, coffee, canola, sugar, and euro rapeseed. The highest grossing commodities for June were coffee, sugar, natural gas, oats, and gold. The Partnership’s year-to-date return is -10.74%.

2009

Units of the Partnership posted a net loss of -5.38% in January. Performance for the index’s sectors was mixed. The energy and agriculture sectors posted losses of -4.24% and -0.94%, respectively while the metals sector posted a moderate gain of 0.01%. Highest grossing commodities for the Partnership’s performance in January were RBOB gasoline, lead, silver, sugar, and orange juice.

Units of the Partnership posted a net loss of -4.16% in February. The agriculture and energy sectors posted losses of -2.65% and -1.61%, respectively while the metals sector posted a moderate gain of 0.42%. The top performing commodities for the Partnership were platinum, copper, sugar, rice, silver, and gold.

Units of the Partnership posted a net gain of 4.69% in March. The agriculture, energy, and metals sectors posted gains of 1.76%, 1.72%, and 1.42%, respectively. Highest grossing commodities for March were crude oil, copper, corn, brent oil, and lead. Despite the gains in March, the Partnership posted a net loss of -5.06% for the quarter ended March 31, 2009.

Units of the Partnership posted a net gain of 1.51% in April. The agriculture and metals sector posted gains of 1.15% and 1.04%, respectively while the energy sector posted a loss of -0.51%. The top performing commodities for the Fund were cotton, copper, soybeans, aluminum, and tin. The highest grossing commodities for April were tin, nickel, cotton, soybean meal, and soybeans.

Units of the Partnership posted a net gain of 16.52% in May. The performance of the Index’s sectors was positive. The energy, agriculture, and metals sector posted gains of 11.03%, 3.51%, and 2.08%, respectively. The top performing commodities for the Fund were RBOB gasoline, crude oil, brent oil, silver, and oats. The highest grossing commodities for May were crude oil, brent oil, wheat, RBOB gasoline, and silver.

Units of the Partnership posted a net loss of -0.27%. For the month of June, the performance of the Index’s energy and metals sectors was positive while the agriculture sector was negative. The energy, agriculture, and metals sector posted returns of 1.69%, 0.38%, and -3.37%, respectively. The top performing commodities for the Fund were aluminum, nickel, sugar, lead, and palladium. The highest grossing commodities for June were crude oil, brent oil, aluminum, sugar, and lead. Accordingly, the Partnership’s year-to-date return is 11.75%.

OFF-BALANCE SHEET RISK

The term “off-balance sheet risk” refers to an unrecorded potential liability that, even though it does not appear on the balance sheet, may result in future obligation or loss. The Partnership trades primarily in futures and forward contracts and may therefore become a party to financial instruments with elements of off-balance sheet market and credit risk. In entering into these contracts, there exists a market risk that such contracts may be significantly influenced by conditions, such as interest rate volatility, resulting in such contracts being less valuable. If the markets should move against all of the open positions of the Partnership at the same time, the Partnership could experience substantial losses.

In addition to market risk, in entering into futures, forward, or other over the counter contracts there is a credit risk that a counterparty will not be able to meet its obligations to the Partnership. The counterparty for futures contracts traded in the United States and on most foreign exchanges is the clearinghouse associated with such exchange. In general, clearinghouses are backed by the corporate members of the clearinghouse who are required to share any financial burden resulting from the non-performance by one of their members and, as such, should significantly reduce this credit risk. In cases where the clearinghouse is not backed by the clearing members, like some foreign exchanges, it is normally backed by a consortium of banks or other financial institutions. In off-exchange transactions, traders must rely solely on the credit of their counterparties. Margins, which may be subject to loss in the event of a default, are generally required in exchange trading, and counterparties may require collateral in the over-the-counter markets.

 

 

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CRITICAL ACCOUNTING POLICIES – VALUATION OF THE PARTNERSHIP’S POSITIONS

The General Partner believes that the accounting policies that are most critical to the Partnership’s financial condition and results of operations relate to the valuation of the Partnership’s positions. The majority of the Partnership’s positions are exchange-traded futures contracts, which are valued daily at settlement prices published by the exchanges. Any spot or forward foreign currency contracts held by the Partnership are also valued at published daily settlement prices or at dealers’ quotes. Thus, the General Partner expects that under normal circumstances substantially all of the Partnership’s assets will be valued on a daily basis using objective measures.

OFF-BALANCE SHEET ARRANGEMENTS

The Partnership does not engage in off-balance sheet arrangements with other entities.

CONTRACTUAL OBLIGATIONS

The Partnership does not enter into any contractual obligations or commercial commitments to make future payments of a type that would be typical for an operating company or that would affect its liquidity or capital resources. The Partnership’s sole business is trading futures, commodity forward, and other commodity related over the counter contracts. All such contracts are settled by offset, not delivery. The Partnership’s Financial Statements, included in this report, present an Schedule of Investments setting forth unrealized gain and unrealized loss on the Partnership’s open futures contracts at June 30, 2010 (unaudited) and December 31, 2009.

 

ITEM 3.

QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Not required.

 

ITEM 4T.

CONTROLS AND PROCEDURES

The principal executive officer and principal financial officer of Beeland Management have evaluated the effectiveness of Beeland Management’s disclosure controls and procedures with respect to the Partnership as of the end of the fiscal quarter for which this Quarterly Report on Form 10-Q is being filed and have concluded that Beeland Management has effective disclosure controls and procedures (except as described in the Partnership’s Report on Form 10-K for fiscal year 2009) to ensure that material information relating to the Partnership is made known to them by others within Beeland Management, particularly during the period in which this quarterly report is being prepared. There have been no significant changes in Beeland Management’s internal controls over financial reporting with respect to the Partnership that occurred during the last fiscal quarter that have materially affected or are reasonably likely to materially affect, Beeland Management’s internal controls over financial reporting with respect to the Partnership.

 

 

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PART II-OTHER INFORMATION

 

ITEM 1.

LEGAL PROCEEDINGS.

None.

 

ITEM 1A.

RISK FACTORS

Not required.

 

ITEM 2.

UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS.

(c) Pursuant to the Partnership’s Limited Partnership Agreement, investors may redeem their units at the end of each calendar month at the then current month-end net asset value per unit. The redemption of units has no impact on the value of units that remain outstanding, and units are not reissued once redeemed.

The following tables summarize the redemptions by investors during the three months ended June 30, 2010:

 

Month:		Units Redeemed:		NAV per Unit ($):
April 30, 2010		5,168		$	162.67
May 31, 2010		5,851		$	146.57
June 30, 2010		2,621		$	146.10

 

ITEM 3.

DEFAULTS UPON SENIOR SECURITIES

Not applicable.

 

ITEM 4.

SUBMISSIONS OF MATTERS TO A VOTE OF SECURITY HOLDERS.

None

 

ITEM 5.

OTHER INFORMATION

None

 

ITEM 6.

EXHIBITS

 

31.01		Rule 13a-14(a)/15d-14(a) Certification
31.02		Rule 13a-14(a)/15d-14(a) Certification
32.01		Section 1350 Certification
32.02		Section 1350 Certification

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized on August 16, 2010.

 

 

 

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