10-Q 1 tctr-10q_06302019.htm QUARTERLY REPORT
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 June 30, 2019.

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: 001-34765
Teucrium Commodity Trust
(Exact name of registrant as specified in its charter)

Delaware | 27-0724963
(State or other jurisdiction of | (I.R.S. Employer
incorporation or organization) | Identification No.)

Three Main Street, Suite 215
Burlington, VT 05401
(Address of principal executive offices) (Zip code)
(802) 540-0019
(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 August 7, 2019
Teucrium Corn Fund | 6,000,004
Teucrium Sugar Fund | 1,350,004
Teucrium Soybean Fund | 2,050,004
Teucrium Wheat Fund | 9,550,004
Teucrium Agricultural Fund | 75,002

1
TEUCRIUM COMMODITY TRUST
Table of Contents

| Page
Part I. FINANCIAL INFORMATION |
Item 1. Financial Statements | 3
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations | 112
Item 3. Quantitative and Qualitative Disclosures About Market Risk | 153
Item 4. Controls and Procedures | 157
Part II. OTHER INFORMATION | 158
Item 1. Legal Proceedings | 158
Item 1A. Risk Factors | 158
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds | 171
Item 3. Defaults Upon Senior Securities | 173
Item 4. Mine Safety Disclosures | 173
Item 5. Other Information | 173
Item 6. Exhibits | 174

2
Part I. FINANCIAL INFORMATION
Item 1. Financial Statements.
Index to Financial Statements

Documents |  | Page
TEUCRIUM COMMODITY TRUST |  |
Combined Statements of Assets and Liabilities at June 30, 2019 (Unaudited) and December 31, 2018 |  | 4
Combined Schedule of Investments at June 30, 2019 (Unaudited) and December 31, 2018 |  | 5
Combined Statements of Operations (Unaudited) for the three and six months ended June 30, 2019 and 2018 |  | 7
Combined Statements of Changes in Net Assets (Unaudited) for the six months ended June 30, 2019 and 2018 |  | 8
Combined Statements of Cash Flows (Unaudited) for the six months ended June 30, 2019 and 2018 |  | 9
Notes to Combined Financial Statements |  | 10
TEUCRIUM CORN FUND |  |
Statements of Assets and Liabilities at June 30, 2019 (Unaudited) and December 31, 2018 |  | 23
Schedule of Investments at June 30, 2019 (Unaudited) and December 31, 2018 |  | 24
Statements of Operations (Unaudited) for the three and six months ended June 30, 2019 and 2018 |  | 26
Statements of Changes in Net Assets (Unaudited) for the six months ended June 30, 2019 and 2018 |  | 26
Statements of Cash Flows (Unaudited) for the six months ended June 30, 2019 and 2018 |  | 27
Notes to Financial Statements |  | 28
TEUCRIUM SOYBEAN FUND |  |
Statements of Assets and Liabilities at June 30, 2019 (Unaudited) and December 31, 2018 |  | 40
Schedule of Investments at June 30, 2019 (Unaudited) and December 31, 2018 |  | 41
Statements of Operations (Unaudited) for the three and six months ended June 30, 2019 and 2018 |  | 43
Statements of Changes in Net Assets (Unaudited) for the six months ended June 30, 2019 and 2018 |  | 44
Statements of Cash Flows (Unaudited) for the six months ended June 30, 2019 and 2018 |  | 45
Notes to Financial Statements |  | 46
TEUCRIUM SUGAR FUND |  |
Statements of Assets and Liabilities at June 30, 2019 (Unaudited) and December 31, 2018 |  | 59
Schedule of Investments at June 30, 2019 (Unaudited) and December 31, 2018 |  | 60
Statements of Operations (Unaudited) for the three and six months ended June 30, 2019 and 2018 |  | 62
Statements of Changes in Net Assets (Unaudited) for the six months ended June 30, 2019 and 2018 |  | 63
Statements of Cash Flows (Unaudited) for the six months ended June 30, 2019 and 2018 |  | 64
Notes to Financial Statements |  | 65
TEUCRIUM WHEAT FUND |  |
Statements of Assets and Liabilities at June 30, 2019 (Unaudited) and December 31, 2018 |  | 79
Schedule of Investments at June 30, 2019 (Unaudited) and December 31, 2018 |  | 80
Statements of Operations (Unaudited) for the three and six months ended June 30, 2019 and 2018 |  | 82
Statements of Changes in Net Assets (Unaudited) for the six months ended June 30, 2019 and 2018 |  | 83
Statements of Cash Flows (Unaudited) for the six months ended June 30, 2019 and 2018 |  | 84
Notes to Financial Statements |  | 85
TEUCRIUM AGRICULTURAL FUND |  |
Statements of Assets and Liabilities at June 30, 2019 (Unaudited) and December 31, 2018 |  | 98
Schedule of Investments at June 30, 2019 (Unaudited) and December 31, 2018 |  | 99
Statements of Operations (Unaudited) for the three and six months ended June 30, 2019 and 2018 |  | 100
Statements of Changes in Net Assets (Unaudited) for the six months ended June 30, 2019 and 2018 |  | 101
Statements of Cash Flows (Unaudited) for the six months ended June 30, 2019 and 2018 |  | 102
Notes to Financial Statements |  | 103

3
TEUCRIUM COMMODITY TRUST
COMBINED STATEMENTS OF ASSETS AND LIABILITIES

| June 30, 2019 | December 31, 2018
| (Unaudited) |
Assets |  |
Cash and cash equivalents | $200,343,594 | $159,250,322
Interest receivable | 1,151 | 113
Other assets | 230,035 | 24,455
Equity in trading accounts: |  |
Commodity futures contracts | 9,226,814 | 569,742
Due from broker | 129,680 | 10,972,275
Total equity in trading accounts | 9,356,494 | 11,542,017
Total assets | 209,931,274 | 170,816,907
Liabilities |  |
Management fee payable to Sponsor | 157,586 | 135,263
Payable for purchases of commercial paper | - | 14,951,548
Other liabilities | 99,818 | 109,342
Equity in trading accounts: |  |
Commodity futures contracts | 1,425,971 | 5,369,594
Due to broker | 10,217,018 | -
Total equity in trading accounts | 11,642,989 | 5,369,594
Total liabilities | 11,900,393 | 20,565,747
Net Assets | $198,030,881 | $150,251,160

The accompanying notes are an integral part of these financial statements.
4
TEUCRIUM COMMODITY TRUST
COMBINED SCHEDULE OF INVESTMENTS
June 30, 2019
(Unaudited)

|  | Percentage of |
Description: Assets | Fair Value | Net Assets | Shares
Cash equivalents |  |  |
Money market funds |  |  |
Fidelity Institutional Money Market Funds - Government Portfolio (cost $3,163) | $3,163 | 0.00% | 3,163
|  |  | Principal Amount
U.S. Treasury Obligations |  |  |
U.S. Treasury Bills 2.02% (cost: $8,141,122 due 7/30/2019) (a)(b) | $8,142,925 | 4.11% | 8,156,000
Commercial Paper |  |  |
Boston Scientific Corporation 2.77% (cost: $12,418,180 due 8/09/2019) | 12,462,895 | 6.29 | 12,500,000
Boston Scientific Corporation 2.75% (cost: $4,949,400 due 8/12/2019) | 4,984,134 | 2.52 | 5,000,000
Broadcom Inc. 2.67% (cost: $12,475,156 due 7/16/2019) | 12,486,198 | 6.31 | 12,500,000
Enable Midstream Partners, LP 2.93% (cost: $4,977,042 due 7/24/2019) | 4,990,736 | 2.52 | 5,000,000
Enable Midstream Partners, LP 2.91% (cost: $4,977,600 due 8/05/2019) | 4,986,000 | 2.52 | 5,000,000
Enable Midstream Partners, LP 2.83% (cost: $9,930,000 due 9/18/2019) | 9,938,556 | 5.02 | 10,000,000
Energy Transfer Operating, L.P. 2.72% (cost: $2,497,938 due 7/05/2019) | 2,499,250 | 1.26 | 2,500,000
Energy Transfer Operating, L.P. 2.72% (cost: $14,986,500 due 7/10/2019) | 14,989,875 | 7.57 | 15,000,000
General Motors Financial Company, Inc. 2.67% (cost: $4,991,534 due 7/10/2019) | 4,996,687 | 2.52 | 5,000,000
General Motors Financial Company, Inc. 2.68% (cost: $4,981,898 due 7/25/2019) | 4,991,134 | 2.52 | 5,000,000
General Motors Financial Company, Inc. 2.68% (cost: $9,940,375 due 9/03/2019) | 9,952,888 | 5.03 | 10,000,000
Royal Caribbean Cruises Ltd. 2.69% (cost: $7,484,981 due 7/01/2019) | 7,500,000 | 3.79 | 7,500,000
Total Commercial Paper (cost: $94,630,604) | $94,778,353 | 47.87% |
Total cash equivalents | $102,924,441 | 51.98% |
|  |  | Notional Amount
|  |  | (Long Exposure)
Commodity futures contracts |  |  |
United States corn futures contracts |  |  |
CBOT corn futures SEP19 (1,561 contracts) | $2,243,475 | 1.13% | $33,151,738
CBOT corn futures DEC19 (1,318 contracts) | 629,613 | 0.32 | 28,435,850
CBOT corn futures DEC20 (1,675 contracts) | 353,525 | 0.18 | 34,819,062
United States soybean futures contracts |  |  |
CBOT soybean futures NOV19 (250 contracts) | 496,100 | 0.25 | 11,537,500
CBOT soybean futures JAN20 (212 contacts) | 887,625 | 0.45 | 9,905,700
CBOT soybean futures NOV20 (244 contracts) | 47,500 | 0.02 | 11,608,300
United States sugar futures contracts |  |  |
ICE sugar futures MAR20 (228 contracts) | 77,426 | 0.04 | 3,460,128
United States wheat futures contracts |  |  |
CBOT wheat futures SEP19 (776 contracts) | 2,599,787 | 1.31 | 20,457,300
CBOT wheat futures DEC20 (733 contracts) | 1,891,763 | 0.96 | 20,652,275
Total commodity futures contracts | $9,226,814 | 4.66% | $174,027,853
|  | Percentage of | Notional Amount
Description: Liabilities | Fair Value | Net Assets | (Long Exposure)
Commodity futures contracts |  |  |
United States sugar futures contracts |  |  |
ICE sugar futures MAY20 (195 contracts) | $12,869 | 0.01% | $2,976,792
ICE sugar futures MAR21 (219 contracts) | 87,327 | 0.04 | 3,492,787
United States wheat futures contracts |  |  |
CBOT wheat futures DEC19 (653 contracts) | 1,325,775 | 0.67 | 17,582,025
Total commodity futures contracts | $1,425,971 | 0.72% | $24,051,604
Exchange-traded funds* |  |  | Shares
Teucrium Corn Fund | $371,682 | 0.19% | 22,658
Teucrium Soybean Fund | 380,232 | 0.19 | 24,181
Teucrium Sugar Fund | 376,978 | 0.19 | 53,124
Teucrium Wheat Fund | 380,036 | 0.19 | 66,037
Total exchange-traded funds (cost $1,954,184) | $1,508,928 | 0.76% |

*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.
(a) Discount yield at the time of purchase
(b) All of the security is held by the broker as collateral for open futures contracts.
The accompanying notes are an integral part of these financial statements.
5
TEUCRIUM COMMODITY TRUST
COMBINED SCHEDULE OF INVESTMENTS
December 31, 2018

Description: Assets | Fair Value | Percentage of Net Assets | Shares
Cash equivalents |  |  |
Money market funds |  |  |
Fidelity Institutional Money Market Funds - Government Portfolio (cost $3,262) | $3,262 | 0.00% | 3,262
|  |  | Principal Amount
Commercial Paper |  |  |
CNH Industrial Capital LLC 2.63% (cost: $9,939,333 due 1/10/2019) | $9,993,500 | 6.65% | 10,000,000
Enable Midstream Partners, LP 2.83% (cost: $2,484,445 due 1/11/2019) | 2,498,056 | 1.66 | 2,500,000
Enable Midstream Partners, LP 2.98% (cost: $2,488,528 due 1/16/2019) | 2,496,927 | 1.66 | 2,500,000
Enable Midstream Partners, LP 2.75% (cost: $4,982,938 due 1/10/2019) | 4,996,588 | 3.33 | 5,000,000
Enable Midstream Partners, LP 3.04% (cost: $9,924,850 due 2/28/2019) | 9,951,570 | 6.62 | 10,000,000
Enbridge Energy Partners, L.P. 2.96% (cost: $2,490,844 due 1/10/2019) | 2,498,169 | 1.66 | 2,500,000
Enbridge Energy Partners, L.P. 2.98% (cost: $4,983,612 due 1/15/2019) | 4,994,264 | 3.32 | 5,000,000
Energy Transfer Operating, L.P. 2.80% (cost: $4,986,486 due 1/4/2019) | 4,998,842 | 3.33 | 5,000,000
Energy Transfer Operating, L.P. 3.10% (cost: $9,975,269 due 1/31/2019) | 9,975,269 | 6.64 | 10,000,000
Ford Motor Credit Company LLC 2.63% (cost: $4,967,500 due 1/3/2019) | 4,999,278 | 3.33 | 5,000,000
Ford Motor Credit Company LLC 2.68% (cost: $4,967,612 due 1/18/2019) | 4,993,744 | 3.32 | 5,000,000
Ford Motor Credit Company LLC 2.81% (cost: $2,483,783 due 2/6/2019) | 2,493,050 | 1.66 | 2,500,000
General Motors Financial Company, Inc. 2.83% (cost: $4,976,278 due 3/5/2019) | 4,976,278 | 3.31 | 5,000,000
Humana Inc. 2.91% (cost: $4,969,200 due 2/11/2019) | 4,983,600 | 3.32 | 5,000,000
Royal Caribbean Cruises Ltd. 2.73% (cost: $7,483,063 due 1/2/2019) | 7,499,427 | 4.99 | 7,500,000
Royal Caribbean Cruises Ltd. 2.77% (cost: $4,988,924 due 1/2/2019) | 4,999,618 | 3.33 | 5,000,000
Total Commercial Paper (total cost: $87,092,665) | $87,348,180 | 58.13% |
Total Cash Equivalents | $87,351,442 | 58.13% |
|  |  | Notional Amount
|  |  | (Long Exposure)
Commodity futures contracts |  |  |
United States corn futures contracts |  |  |
CBOT corn futures MAY19 (1,030 contracts) | $107,363 | 0.07% | $19,724,500
United States soybean futures contracts |  |  |
CBOT soybean futures MAR19 (218 contracts) | 228,400 | 0.15 | 9,755,500
United States sugar futures contracts |  |  |
ICE sugar futures MAY19 (278 contracts) | 29,254 | 0.02 | 3,767,456
ICE sugar futures JUL19 (235 contracts) | 204,725 | 0.14 | 3,221,568
Total commodity futures contracts | $569,742 | 0.38% | $36,469,024
|  | Percentage of | Notional Amount
Description: Liabilities | Fair Value | Net Assets | (Long Exposure)
Commodity futures contracts |  |  |
United States corn futures contracts |  |  |
CBOT corn futures JUL19 (866 contracts) | $348,200 | 0.23% | $16,919,475
CBOT corn futures DEC19 (993 contracts) | 949,088 | 0.63 | 19,735,875
United States soybean futures contracts |  |  |
CBOT soybean futures MAY19 (185 contracts) | 35,688 | 0.02 | 8,396,688
CBOT soybean futures NOV19 (209 contracts) | 3,562 | 0.00 | 9,773,363
United States sugar futures contracts |  |  |
ICE sugar futures MAR20 (257 contracts) | 47,656 | 0.03 | 3,785,096
United States wheat futures contracts |  |  |
CBOT wheat futures MAY19 (756 contracts) | 1,367,838 | 0.91 | 19,296,900
CBOT wheat futures JUL19 (637 contracts) | 544,812 | 0.36 | 16,514,225
CBOT wheat futures DEC19 (713 contracts) | 2,072,750 | 1.38 | 19,340,125
Total commodity futures contracts | $5,369,594 | 3.56% | $113,761,747
Exchange-traded funds* |  |  | Shares
Teucrium Corn Fund | $383,506 | 0.26% | 23,808
Teucrium Soybean Fund | 381,970 | 0.25 | 23,581
Teucrium Sugar Fund | 374,067 | 0.25 | 52,924
Teucrium Wheat Fund | 383,743 | 0.26 | 64,537
Total exchange-traded funds (cost $2,021,172) | $1,523,286 | 1.02% |

*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.
6
TEUCRIUM COMMODITY TRUST
COMBINED STATEMENTS OF OPERATIONS
(Unaudited)

| Three months ended | Three months ended | Six months ended | Six months ended
| June 30, 2019 | June 30, 2018 | June 30, 2019 | June 30, 2018
Income |  |  |  |
Realized and unrealized gain (loss) on trading of commodity futures contracts: |  |  |  |
Realized (loss) gain on commodity futures contracts | $(7,714,964) | $4,467,596 | $(12,321,045) | $6,692,509
Net change in unrealized appreciation or (depreciation) on commodity futures contracts | 17,277,425 | (12,318,563) | 12,600,695 | (7,253,850)
Interest income | 1,101,771 | 879,030 | 2,087,816 | 1,519,669
Total income (loss) | 10,664,232 | (6,971,937) | 2,367,466 | 958,328
Expenses |  |  |  |
Management fees | 412,685 | 433,254 | 779,348 | 815,838
Professional fees | 333,153 | 426,230 | 635,234 | 701,997
Distribution and marketing fees | 729,998 | 807,165 | 1,297,194 | 1,562,969
Custodian fees and expenses | 89,371 | 99,544 | 173,420 | 184,022
Business permits and licenses fees | 22,360 | 26,959 | 54,306 | 87,727
General and administrative expenses | 81,706 | 89,688 | 145,425 | 157,885
Brokerage commissions | 13,144 | 46,147 | 41,273 | 88,724
Other expenses | 7,661 | 32,848 | 15,562 | 66,139
Total expenses | 1,690,078 | 1,961,835 | 3,141,762 | 3,665,301
Expenses waived by the Sponsor | (98,526) | (379,836) | (232,643) | (642,134)
Total expenses, net | 1,591,552 | 1,581,999 | 2,909,119 | 3,023,167
Net income (loss) | $9,072,680 | $(8,553,936) | $(541,653) | $(2,064,839)

The accompanying notes are an integral part of these financial statements.
7
TEUCRIUM COMMODITY TRUST
COMBINED STATEMENTS OF CHANGES IN NET ASSETS
(Unaudited)

| Six months ended | Six months ended
| June 30, 2019 | June 30, 2018
Operations |  |
Net loss | $(541,653) | $(2,064,839)
Capital transactions |  |
Issuance of Shares | 61,931,985 | 53,863,007
Redemption of Shares | (13,611,950) | (22,602,148)
Net change in the cost of the Underlying Funds | 1,339 | (574,895)
Total capital transactions | 48,321,374 | 30,685,964
Net change in net assets | 47,779,721 | 28,621,125
Net assets, beginning of period | 150,251,160 | 142,946,752
Net assets, end of period | $198,030,881 | $171,567,877

The accompanying notes are an integral part of these financial statements.
8
TEUCRIUM COMMODITY TRUST
COMBINED STATEMENTS OF CASH FLOWS
(Unaudited)

| Six months ended | Six months ended
| June 30, 2019 | June 30, 2018
Cash flows from operating activities: |  |
Net loss | $(541,653) | $(2,064,839)
Adjustments to reconcile net loss to net cash used in operating activities: |
Net change in unrealized appreciation or (depreciation) on commodity futures contracts | (12,600,695) | 7,253,850
Changes in operating assets and liabilities: |  |
Due from broker | 10,842,595 | (13,310,837)
Interest receivable | (1,038) | 250
Other assets | (205,580) | (135,575)
Due to broker | 10,217,018 | -
Management fee payable to Sponsor | 22,323 | 20,919
Payable for purchases of commercial paper | (14,951,548) | -
Other liabilities | (9,524) | 71,287
Net cash used in operating activities | (7,228,102) | (8,164,945)
Cash flows from financing activities: |  |
Proceeds from sale of Shares | 61,931,985 | 53,863,007
Redemption of Shares | (13,611,950) | (22,602,148)
Net change in cost of the Underlying Funds | 1,339 | (574,895)
Net cash provided by financing activities | 48,321,374 | 30,685,964
Net change in cash and cash equivalents | 41,093,272 | 22,521,019
Cash and cash equivalents cash beginning of period | 159,250,322 | 137,945,626
Cash and cash equivalents end of period | $200,343,594 | $160,466,645

The accompanying notes are an integral part of these financial statements.
9
NOTES TO COMBINED FINANCIAL STATEMENTS
June 30, 2019
(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 29, 2019, the Trust and the Funds operate pursuant to the Trust’s Fifth 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. As of June 30, 2019, CORN offered its shares pursuant to a registration statement that was declared effective 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 April 29, 2019. This registration statement for WEAT registered an additional 30,000,000 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 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 Fund’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 well as the most recent Form S-1 filing, as applicable. The operating results for the three and six months ended June 30, 2019 are not necessarily indicative of the results to be expected for the full year ending December 31, 2019.
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
The Sponsor employs U.S. Bank N.A. 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 doing business as U.S. Bank Global Fund Services ("Fund Services") is 615 E. Michigan Street, Milwaukee, WI 53202. In addition, effective on the Conversion Date, Fund Services, 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 Fund Services 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.
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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. Pursuant to a Consulting Services Agreement, Foreside Consulting Services, LLC, performs certain consulting support services for the Trust's Sponsor. Additionally, Foreside Distributors, LLC performs certain distribution consulting services pursuant to a Distribution Consulting Agreement with the Trust's Sponsor.
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.
The Sponsor employs Exchange Traded Concepts, LLC ("ETC") as the Marketing Agent, providing certain marketing consulting services in connection with the content strategy and e-mail marketing for the Funds. For its services as the Marketing Agent, ETC receives $5,000 a month and 0.02% of the Fund's average daily net assets, when assets are above the combined amount of $160 million. These services are recorded in distribution and marketing fees on the combined statements of the operations. A summary of these expenses is included below:

| Three months ended June 30, 2019 | Three months ended June 30, 2018 | Six months ended June 30, 2019 | Six months ended June 30, 2018
Amount Recognized for Custody Services | $89,371 | $99,544 | $173,420 | $184,022
Amount of Custody Services Waived | $5,951 | $31,268 | $19,567 | $44,439
Amount Recognized for Distribution Services | $35,502 | $39,053 | $73,407 | $87,201
Amount of Distribution Services Waived | $2,294 | $6,930 | $3,900 | $21,591
Amount Recognized for Brokerage Commissions | $13,144 | $46,147 | $41,272 | $88,724
Amount of Brokerage Commissions Waived | $- | $- | $- | $-
Amount Recognized for Wilmington Trust | $- | $- | $- | $-
Amount of Wilmington Trust Waived | $- | $- | $- | $-
Amount Recognized for Marketing Agent | $15,000 | $- | $15,000 | $-
Amount of Marketing Agent Waived | $491 | $- | $491 | $-

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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.
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 and cash equivalents 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.
Beginning in February of 2019, the Sponsor began investing a portion of the cash held by the broker in short term Treasury Bills as collateral for open futures contracts. 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.
The Sponsor adopted ASC 606, Revenue from Contracts With Customers, for the year ended December 31, 2018. The adoption did not have a material impact on the financial statements of the Trust or the Funds.
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 is organized and will be operated as a Delaware statutory trust. For federal income tax purposes, each Fund will be treated as a publicly traded partnership. A publicly traded partnership is generally treated as a corporation for federal income tax purposes unless 90% or more of the publicly traded partnership’s gross income for each taxable year of its existence consists of qualifying income as defined in section 7704(d) of the Internal Revenue Code of 1986, as amended. Qualifying income is defined as generally including, in pertinent part, interest (other than from a financial business), dividends, and gains from the sale or disposition of capital assets held for the production of interest or dividends. In the case of a partnership of which a principal activity is the buying and selling of commodities, other than as inventory, or of futures, forwards and options with respect to commodities, qualifying income also includes income and gains from commodities and from futures, forwards, options with respect to commodities and, provided the partnership is a trader or investor with respect to such assets, swaps and other notional principal contracts with respect to commodities. Each Fund expects that at least 90% of the Fund’s gross income for each taxable year will consist of qualifying income and that the Fund will be taxed as a partnership for federal income tax purposes. 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 2016 to 2018, 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 June 30, 2019 and for the years ended December 31, 2018, 2017, and 2016. 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.
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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 six months ended June 30, 2019 and 2018.
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 and Cash Equivalents
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 February 2019, the Sponsor began investing a portion of the cash held by the broker in short term Treasury Bills as collateral for open futures contracts, which is classified as a cash equivalent and is not FDIC insured.

| June 30, 2019 | December 31, 2018
Money Market Funds | $3,163 | $3,262
Demand Deposit Savings Accounts | 97,419,153 | 71,898,880
Commercial Paper | 94,778,353 | 87,348,180
Treasury Bills | 8,142,925 | -
Total cash and cash equivalents as presented on the Statement of Assets and Liabilities | $200,343,594 | $159,250,322

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.
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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 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.
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| Three months ended June 30, 2019 | Three months ended June 30, 2018 | Six months ended June 30, 2019 | Six months ended June 30, 2018
Recognized Related Party Transactions | $426,792 | $472,586 | $1,117,600 | $1,452,851
Waived Related Party Transactions | $39,877 | $122,390 | $76,557 | $251,171

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 June 30, 2019 | $- | $33,391 | $57,954 | $- | $7,181 | $98,526
Three months ended June 30, 2018 | $98,041 | $84,485 | $66,209 | $121,015 | $10,086 | $379,836
Six months ended June 30, 2019 | $5,639 | $96,303 | $99,436 | $2,500 | $28,765 | $232,643
Six months ended June 30, 2018 | $138,723 | $184,427 | $146,899 | $144,784 | $27,172 | $642,134

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.
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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 June 30, 2019 and December 31, 2018, 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 three and six months ended June 30, 2019 and year ended December 31, 2018, 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”) 2019-04: “Codification Improvements to Topic 326, Financial Instruments – Credit Losses, Topic 815, Derivatives and hedging, and Topic 825, Financial Instruments.” The amendments clarify and improve areas of guidance related to the recently issued standards on credit losses, hedging, and recognition and measurement, specifically relating to ASU 2017-12. The amendments were adopted for the quarter ended June 30, 2019; the adoption did not have a material impact on the financial statements and disclosures of the Trust or the Funds.
The FASB issued ASU2019-01: "Leases (Topic 842): Codification Improvements. These amendments align the guidance for fair value of underlying assets by lessors that are not manufacturers or dealers in Topic 842 with that of existing guidance. 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 but the amendment is not expected to have a material impact on the financial statements of the Trust or the Funds.
The FASB issued 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 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 were adopted for the quarter ended March 31, 2019; the adoption did not have a material impact on the financial statements and disclosures of the Trust or the Funds.
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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 were adopted for the quarter ended March 31, 2019; 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 June 30, 2019 and December 31, 2018:
June 30, 2019

Assets: | Level 1 | Level 2 | Level 3 | Balance as of June 30, 2019
Cash Equivalents | $102,924,441 | $- | $- | $102,924,441
Commodity Futures Contracts |  |  |  |
Corn futures contracts | 3,226,613 | - | - | 3,226,613
Soybeans futures contracts | 1,431,225 | - | - | 1,431,225
Sugar futures contracts | 74,426 | - | - | 74,426
Wheat futures contracts | 4,491,550 | - | - | 4,491,550
Total | $112,151,255 | $- | $- | $112,151,255
Liabilities: | Level 1 | Level 2 | Level 3 | Balance as of June 30, 2019
Commodity Futures Contracts |  |  |  |
Sugar futures contracts | $100,196 | - | - | $100,196
Wheat futures contracts | 1,325,775 | - | - | 1,325,775
Total | $1,425,971 | $- | $- | $1,425,971

December 31, 2018

Assets: | Level 1 | Level 2 | Level 3 | Balance as of December 31, 2018
Cash Equivalents | $87,351,442 | $- | $- | $87,351,442
Commodity Futures Contracts |  |  |  |
Corn futures contracts | 107,363 | - | - | 107,363
Soybeans futures contracts | 228,400 | - | - | 228,400
Sugar futures contracts | 233,979 | - | - | 233,979
Total | $87,921,185 | $- | $- | $87,921,185
Liabilities: | Level 1 | Level 2 | Level 3 | Balance as of December 31, 2018
Commodity Futures Contracts |  |  |  |
Corn futures contracts | $1,297,288 | $- | $- | $1,297,288
Soybeans futures contracts | 39,250 | - | - | 39,250
Sugar futures contracts | 47,656 | - | - | 47,656
Wheat futures contracts | 3,985,400 | - | - | 3,985,400
Total | $5,369,594 | $- | $- | $5,369,594

17
For the six months ended June 30, 2019 and year ended December 31, 2018, 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 three and six months ended June 30, 2019 and year ended December 31, 2018, 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 June 30, 2019 and December 31, 2018.
Offsetting of Financial Assets and Derivative Assets as of June 30, 2019

| (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 | Due to Broker | Net Amount
Commodity Price |  |  |  |  |  |
Corn futures contracts | $3,226,613 | $- | $3,226,613 | $- | $3,226,613 | $-
Soybeans futures contracts | $1,431,225 | $- | $1,431,225 | $- | $738,351 | $692,874
Sugar futures contracts | $77,426 | $- | $77,426 | $77,426 | $- | $-
Wheat futures contracts | $4,491,550 | $- | $4,491,550 | $1,325,775 | $3,165,775 | $-

18
Offsetting of Financial Liabilities and Derivative Liabilities as of June 30, 2019

| (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 | Due from Broker | Net Amount
Commodity Price |  |  |  |  |  |
Sugar futures contracts | $100,196 | $- | $100,196 | $77,426 | $22,770 | $-
Wheat futures contracts | $1,325,775 | $- | $1,325,775 | $1,325,775 | $- | $-

Offsetting of Financial Assets and Derivative Assets as of December 31, 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 | Due to Broker | Net Amount
Commodity Price |  |  |  |  |  |
Corn futures contracts | $107,363 | $- | $107,363 | $107,363 |  | $-
Soybeans futures contracts | $228,400 | $- | $228,400 | $39,250 | $- | $189,150
Sugar futures contracts | $233,979 | $- | $233,979 | $47,656 | $- | $186,323

19
Offsetting of Financial Liabilities and Derivative Liabilities as of December 31, 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 | Due from Broker | Net Amount
Commodity Price |  |  |  |  |  |
Corn futures contracts | $1,297,288 | $- | $1,297,288 | $107,363 | $1,189,925 | $-
Soybeans futures contracts | $39,250 | $- | $39,250 | $39,250 | $- | $-
Sugar futures contracts | $47,656 | $- | $47,656 | $47,656 | $- | $-
Wheat futures contracts | $3,985,400 | $- | $3,985,400 | $- | $3,985,400 | $-

The following is a summary of realized and unrealized gains (losses) of the derivative instruments utilized by the Trust:
Three months ended June 30, 2019

| Realized Loss on Commodity Futures Contracts | Net Change in Unrealized Appreciation (Depreciation) on Commodity Futures Contracts
Commodity Price |  |
Corn futures contracts | $(2,187,325) | $6,531,538
Soybeans futures contracts | (1,187,050) | 1,746,950
Sugar futures contracts | (68,701) | (269,125)
Wheat futures contracts | (4,271,888) | 9,268,062
Total commodity futures contracts | $(7,714,964) | $17,277,425

Three months ended June 30, 2018

| Realized Gain (Loss) on Commodity Futures Contracts | Net Change in Unrealized (Depreciation) Appreciation on Commodity Futures Contracts
Commodity Price |  |
Corn futures contracts | $1,931,575 | $(8,790,088)
Soybeans futures contracts | (2,413) | (2,456,537)
Sugar futures contracts | (1,028,754) | 278,275
Wheat futures contracts | 3,567,188 | (1,350,213)
Total commodity futures contracts | $4,467,596 | $(12,318,563)

20
Six months ended June 30, 2019

| Realized (Loss) Gain on Commodity Futures Contracts | Net Change in Unrealized Appreciation (Depreciation) on Commodity Futures Contracts
Commodity Price |  |
Corn futures contracts | $(3,093,050) | $4,416,538
Soybeans futures contracts | (1,153,412) | 1,242,075
Sugar futures contracts | 292,667 | (209,093)
Wheat futures contracts | (8,367,250) | 7,151,175
Total commodity futures contracts | $(12,321,045) | $12,600,695

Six months ended June 30, 2018

| Realized Gain (Loss) on Commodity Futures Contracts | Net Change in Unrealized Depreciation on Commodity Futures Contracts
Commodity Price |  |
Corn futures contracts | $3,170,538 | $(4,809,338)
Soybeans futures contracts | (80,012) | (1,574,000)
Sugar futures contracts | (1,297,867) | (608,462)
Wheat futures contracts | 4,899,850 | (262,050)
Total commodity futures contracts | $6,692,509 | $(7,253,850)

Volume of Derivative Activities
The average notional market value categorized by primary underlying risk for the futures contracts held was $175.1 million and $160.3 million, respectively, for the three and six months ended June 30, 2019 and $177.1 million and $168.0 million, respectively, for the three and six months ended June 30, 2018.
Note 6 - Organizational and Offering Costs
Expenses incurred in organizing of the Trust and the initial offering of the shares, including applicable SEC registration fees, were borne directly by the Sponsor for the Funds and will be borne directly by the Sponsor for any series of the Trust which is not yet operating or will be issued in the future. The Trust will not be obligated to reimburse the Sponsor.
Note 7 – Detail of the net assets and shares outstanding of the Funds that are a series of the Trust
The following are the net assets and shares outstanding of each Fund that is a series of the Trust and, thus, in total, comprise the combined net assets of the Trust:
21
June 30, 2019

| Outstanding Shares | Net Assets
Teucrium Corn Fund | 5,875,004 | $96,373,394
Teucrium Soybean Fund | 2,100,004 | 33,021,388
Teucrium Sugar Fund | 1,400,004 | 9,934,774
Teucrium Wheat Fund | 10,200,004 | 58,699,891
Teucrium Agricultural Fund: |  |
Net assets including the investment in the Underlying Funds | 75,002 | 1,510,362
Less: Investment in the Underlying Funds |  | (1,508,928)
Net for the Fund in the combined net assets of the Trust |  | 1,434
Total |  | $198,030,881

December 31, 2018

| Outstanding Shares | Net Assets
Teucrium Corn Fund | 3,500,004 | $56,379,057
Teucrium Soybean Fund | 1,725,004 | 27,942,017
Teucrium Sugar Fund | 1,525,004 | 10,778,739
Teucrium Wheat Fund | 9,275,004 | 55,149,873
Teucrium Agricultural Fund: |  |
Net assets including the investment in the Underlying Funds | 75,002 | 1,524,760
Less: Investment in the Underlying Funds |  | (1,523,286)
Net for the Fund in the combined net assets of the Trust |  | 1,474
Total |  | $150,251,160

The detailed information for the subscriptions and redemptions, and other financial information for each Fund that is a series of the Trust are included in the accompanying financial statements of each Fund.
Note 8 – Subsequent Events
Management has evaluated the financial statements for the quarter-ended June 30, 2019 for subsequent events through the date of this filing and noted no material events requiring either recognition through the date of the filing or disclosure herein for the Trust and Funds.
CORN: Nothing to report.
SOYB: Nothing to report.
CANE: Nothing to report.
WEAT: Nothing to report.
TAGS: Nothing to report.
22
TEUCRIUM CORN FUND
STATEMENTS OF ASSETS AND LIABILITIES

| June 30, 2019 | December 31, 2018
| (Unaudited) |
Assets |  |
Cash and cash equivalents | $98,420,157 | $58,910,133
Interest receivable | 533 | 7
Other assets | 56,684 | 6,380
Equity in trading accounts: |  |
Commodity futures contracts | 3,226,613 | 107,363
Due from broker | - | 3,730,196
Total equity in trading accounts | 3,226,613 | 3,837,559
Total assets | 101,703,987 | 62,754,079
Liabilities |  |
Management fee payable to Sponsor | 73,925 | 51,822
Payable for purchases of commercial paper | - | 4,981,957
Other liabilities | 25,443 | 43,955
Equity in trading accounts: |  |
Commodity futures contracts | - | 1,297,288
Due to broker | 5,231,225 | -
Total equity in trading accounts | 5,231,225 | 1,297,288
Total liabilities | 5,330,593 | 6,375,022
Net assets | $96,373,394 | $56,379,057
Shares outstanding | 5,875,004 | 3,500,004
Shares authorized | 10,325,000 | 12,800,000
Net asset value per share | $16.40 | $16.11
Market value per share | $16.44 | $16.05

23
TEUCRIUM CORN FUND
SCHEDULE OF INVESTMENTS
June 30, 2019
(Unaudited)

Description: Assets | Fair Value | Percentage of Net Assets | Shares
Cash equivalents |  |  |
Money market funds |  |  |
Fidelity Institutional Money Market Funds - Government Portfolio (cost $101) | $101 | 0.00% | 101
|  |  | Principal Amount
U.S. Treasury Obligations |  |  |
U.S. Treasury Bills 2.02% (cost: $3,823,013 due 7/30/2019) (a)(b) | $3,823,860 | 3.97% | 3,830,000
Commercial Paper |  |  |
Boston Scientific Corporation 2.77% (cost: $4,967,272 due 8/09/2019) | $4,985,158 | 5.17% | 5,000,000
Boston Scientific Corporation 2.75% (cost: $2,484,700 due 8/12/2019) | 2,492,067 | 2.59 | 2,500,000
Broadcom Inc. 2.67% (cost: $4,990,063 due 7/16/2019) | 4,994,479 | 5.18 | 5,000,000
Enable Midstream Partners, LP 2.91% (cost: $2,488,800 due 8/05/2019) | 2,493,000 | 2.59 | 2,500,000
Enable Midstream Partners, LP 2.83% (cost: $4,965,000 due 9/18/2019) | 4,969,278 | 5.16 | 5,000,000
Energy Transfer Operating, L.P. 2.72% (cost: $2,497,938 due 7/05/2019) | 2,499,250 | 2.59 | 2,500,000
Energy Transfer Operating, L.P. 2.72% (cost: $9,991,000 due 7/10/2019) | 9,993,250 | 10.37 | 10,000,000
General Motors Financial Company, Inc. 2.68% (cost: $2,490,949 due 7/25/2019) | 2,495,567 | 2.59 | 2,500,000
General Motors Financial Company, Inc. 2.68% (cost: $4,970,187 due 9/03/2019) | 4,976,444 | 5.16 | 5,000,000
Royal Caribbean Cruises Ltd. 2.69% (cost: $7,484,981 due 7/01/2019) | 7,500,000 | 7.78 | 7,500,000
Total Commercial Paper (cost: $47,330,890) | $47,398,493 | 49.18% |
Total cash equivalents | $51,222,454 | 53.15% |
|  |  | Notional Amount
|  |  | (Long Exposure)
Commodity futures contracts |  |  |
United States corn futures contracts |  |  |
CBOT corn futures SEP19 (1,561 contracts) | $2,243,475 | 2.33% | $33,151,738
CBOT corn futures DEC19 (1,318 contracts) | 629,613 | 0.65 | 28,435,850
CBOT corn futures DEC20 (1,675 contracts) | 353,525 | 0.37 | 34,819,062
Total commodity futures contracts | $3,226,613 | 3.35% | $96,406,650

(a) Discount yield at the time of purchase.
(b) All of the security is held by the broker as collateral for open futures contracts
The accompanying notes are an integral part of these financial statements.
24
TEUCRIUM CORN FUND
SCHEDULE OF INVESTMENTS
December 31, 2018

Description: Assets | Fair Value | Percentage of Net Assets | Shares
Cash equivalents |  |  |
Money market funds |  |  |
Fidelity Institutional Money Market Funds - Government Portfolio (cost $100) | $100 | 0.00% | 100
|  |  | Principal Amount
Commercial Paper |  |  |
CNH Industrial Capital LLC 2.62% (cost: $4,969,667 due 1/10/2019) | $4,996,750 | 8.86% | 5,000,000
Enable Midstream Partners, LP 2.83% (cost: $2,484,445 due 1/11/2019) | 2,498,056 | 4.43 | 2,500,000
Enable Midstream Partners, LP 2.98% (cost: $2,488,528 due 1/16/2019) | 2,496,927 | 4.43 | 2,500,000
Enable Midstream Partners, LP 2.75% (cost: $2,491,469 due 1/10/2019) | 2,498,294 | 4.43 | 2,500,000
Enable Midstream Partners, LP 3.04% (cost: $4,962,425 due 2/28/2019) | 4,975,785 | 8.83 | 5,000,000
Energy Transfer Operating, L.P. 3.10% (cost: $2,493,817 due 1/31/2019) | 2,493,817 | 4.42 | 2,500,000
Ford Motor Credit Company LLC 2.63% (cost: $2,483,750 due 1/3/2019) | 2,499,639 | 4.43 | 2,500,000
Ford Motor Credit Company LLC 2.68% (cost: $2,483,806 due 1/18/2019) | 2,496,872 | 4.43 | 2,500,000
General Motors Financial Company, Inc. 2.83% (cost: $2,488,139 due 3/5/2019) | 2,488,139 | 4.41 | 2,500,000
Humana Inc. 2.91% (cost: $2,484,600 due 2/11/2019) | 2,491,800 | 4.42 | 2,500,000
Royal Caribbean Cruises Ltd. 2.73% (cost: $2,494,354 due 1/2/2019) | 2,499,809 | 4.44 | 2,500,000
Royal Caribbean Cruises Ltd. 2.77% (cost: $2,494,462 due 1/2/2019) | 2,499,809 | 4.44 | 2,500,000
Total Commercial Paper (cost: $34,819,462) | $34,935,697 | 61.97% |
Total Cash Equivalents | $34,935,797 | 61.97% |
|  |  | Notional Amount
|  |  | (Long Exposure)
Commodity futures contracts |  |  |
United States corn futures contracts |  |  |
CBOT corn futures MAY19 (1,030 contracts) | $107,363 | 0.19% | $19,724,500
|  | Percentage of | Notional Amount
Description: Liabilities | Fair Value | Net Assets | (Long Exposure)
Commodity futures contracts |  |  |
United States corn futures contracts |  |  |
CBOT corn futures JUL19 (866 contracts) | $348,200 | 0.62% | $16,919,475
CBOT corn futures DEC19 (993 contracts) | 949,088 | 1.68 | 19,735,875
Total commodity futures contracts | $1,297,288 | 2.30% | $36,655,350

The accompanying notes are an integral part of these financial statements.
25
TEUCRIUM CORN FUND
STATEMENTS OF OPERATIONS
(Unaudited)

| Three months ended | Three months ended | Six months ended | Six months ended
| June 30, 2019 | June 30, 2018 | June 30, 2019 | June 30, 2018
Income |  |  |  |
Realized and unrealized gain (loss) on trading of commodity futures contracts: |  |  |  |
Realized (loss) gain on commodity futures contracts | $(2,187,325) | $1,931,575 | $(3,093,050) | $3,170,538
Net change in unrealized appreciation or (depreciation) on commodity futures contracts | 6,531,538 | (8,790,088) | 4,416,538 | (4,809,338)
Interest income | 474,635 | 393,434 | 853,579 | 680,931
Total income (loss) | 4,818,848 | (6,465,079) | 2,177,067 | (957,869)
Expenses |  |  |  |
Management fees | 176,715 | 191,227 | 316,837 | 361,079
Professional fees | 145,210 | 146,286 | 243,455 | 248,003
Distribution and marketing fees | 285,848 | 319,426 | 484,262 | 607,486
Custodian fees and expenses | 35,343 | 28,547 | 61,966 | 59,181
Business permits and licenses fees | 3,534 | 7,808 | 9,139 | 20,671
General and administrative expenses | 27,483 | 31,109 | 52,443 | 65,655
Brokerage commissions | 5,301 | 20,470 | 18,768 | 41,310
Other expenses | 3,534 | 9,860 | 6,337 | 22,232
Total expenses | 682,968 | 754,733 | 1,193,207 | 1,425,617
Expenses waived by the Sponsor | - | (98,041) | (5,639) | (138,723)
Total expenses, net | 682,968 | 656,692 | 1,187,568 | 1,286,894
Net income (loss) | $4,135,880 | $(7,121,771) | $989,499 | $(2,244,763)
Net income (loss) per share | $1.18 | $(1.56) | $0.29 | $(0.32)
Net income (loss) per weighted average share | $0.93 | $(1.65) | $0.25 | $(0.54)
Weighted average shares outstanding | 4,439,564 | 4,320,059 | 3,993,650 | 4,156,219

The accompanying notes are an integral part of these financial statements.
TEUCRIUM CORN FUND
STATEMENTS OF CHANGES IN NET ASSETS
(Unaudited)

| Six months ended | Six months ended
| June 30, 2019 | June 30, 2018
Operations |  |
Net income (loss) | $989,499 | $(2,244,763)
Capital transactions |  |
Issuance of Shares | 40,556,488 | 20,834,115
Redemption of Shares | (1,551,650) | (10,372,637)
Total capital transactions | 39,004,838 | 10,461,478
Net change in net assets | 39,994,337 | 8,216,715
Net assets, beginning of period | $56,379,057 | $64,901,479
Net assets, end of period | $96,373,394 | $73,118,194
Net asset value per share at beginning of period | $16.11 | $16.75
Net asset value per share at end of period | $16.40 | $16.43
Creation of Shares | 2,475,000 | 1,175,000
Redemption of Shares | 100,000 | 600,000

The accompanying notes are an integral part of these financial statements.
26
TEUCRIUM CORN FUND
STATEMENTS OF CASH FLOWS
(Unaudited)

| Six months ended | Six months ended
| June 30, 2019 | June 30, 2018
Cash flows from operating activities: |  |
Net income (loss) | $989,499 | $(2,244,763)
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities: |  |
Net change in unrealized appreciation or (depreciation) on commodity futures contracts | (4,416,538) | 4,809,338
Changes in operating assets and liabilities: |
Due from broker | 3,730,196 | (6,843,084)
Interest receivable | (526) | 73
Other assets | (50,304) | (34,148)
Due to broker | 5,231,225 | -
Management fee payable to Sponsor | 22,103 | 8,163
Payable for purchases of commercial paper | (4,981,957) | -
Other liabilities | (18,512) | 16,003
Net cash provided by (used in) operating activities | 505,186 | (4,288,418)
Cash flows from financing activities: |  |
Proceeds from sale of Shares | 40,556,488 | 20,834,115
Redemption of Shares | (1,551,650) | (10,372,637)
Net cash provided by financing activities | 39,004,838 | 10,461,478
Net change in cash and cash equivalents | 39,510,024 | 6,173,060
Cash and cash equivalents, beginning of period | 58,910,133 | 63,139,461
Cash and cash equivalents, end of period | $98,420,157 | $69,312,521

The accompanying notes are an integral part of these financial statements.
27
NOTES TO FINANCIAL STATEMENTS
June 30, 2019
(Unaudited)
Note 1 – Organization and Operation
Teucrium Corn Fund (referred to herein as “CORN,” or the “Fund”) is a commodity pool that is a series of Teucrium Commodity Trust (“Trust”), a Delaware statutory trust formed on September 11, 2009. The Fund issues common units, called the “Shares,” representing fractional undivided beneficial interests in the Fund. The Fund continuously offers Creation Baskets consisting of 25,000 Shares at their Net Asset Value (“NAV”) to “Authorized Purchasers” through Foreside Fund Services, LLC, which is the distributor for the Fund (the “Distributor”). Authorized Purchasers sell such Shares, which are listed on the New York Stock Exchange (“NYSE”) Arca under the symbol “CORN,” to the public at per-Share offering prices that reflect, among other factors, the trading price of the Shares on the NYSE Arca, the NAV of the Fund at the time the Authorized Purchaser purchased the Creation Baskets and the NAV at the time of the offer of the Shares to the public, the supply of and demand for Shares at the time of sale, and the liquidity of the markets for corn interests. The Fund’s Shares trade in the secondary market on the NYSE Arca at prices that are lower or higher than their NAV per Share.
The investment objective of CORN is to have the daily changes in percentage terms of the Shares’ Net Asset Value (“NAV”) reflect the daily changes in percentage terms of a weighted average of the closing settlement prices for three futures contracts for corn (“Corn Futures Contracts”) that are traded on the Chicago Board of Trade (“CBOT”):
CORN Benchmark

CBOT Corn Futures Contract | Weighting
Second to expire | 35%
Third to expire | 30%
December following the third to expire | 35%

The Fund commenced investment operations on June 9, 2010 and has a fiscal year ending on December 31. The Fund’s sponsor is Teucrium Trading, LLC (the “Sponsor”). The Sponsor is responsible for the management of the Fund. 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.
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, 2019.
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 Fund’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 well as the most recent Form S-1 filing, as applicable. The operating results for the three and six months ended June 30, 2019 are not necessarily indicative of the results to be expected for the full year ending December 31, 2019.
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
The Sponsor employs U.S. Bank N.A. 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 doing business as U.S. Bank Global Fund Services ("Fund Services") is 615 E. Michigan Street, Milwaukee, WI 53202. In addition, effective on the Conversion Date, Fund Services, 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 Fund Services will receive an asset based fee, subject to a minimum annual fee.
28
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 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 statements of operations. A summary of these expenses is included below. Pursuant to a Consulting Services Agreement, Foreside Consulting Services, LLC, performs certain consulting support services for the Trust's Sponsor. Additionally, Foreside Distributors, LLC performs certain distribution consulting services pursuant to a Distribution Consulting Agreement with the Trust's Sponsor.
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 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 statements of operations. A summary of these expenses is included below.
The Sponsor employs Exchange Traded Concepts, LLC ("ETC") as the Marketing Agent, providing certain marketing consulting services in connection with the content strategy and e-mail marketing for the Funds. For its services as the Marketing Agent, ETC receives $5,000 a month and 0.02% of the Fund's average daily net assets, when assets are above the combined amount of $160 million. These services are recorded in distribution and marketing fees on the statements of the operations. A summary of these expenses is included below:

| Three months ended June 30, 2019 | Three months ended June 30, 2018 | Six months ended June 30, 2019 | Six months ended June 30, 2019
Amount Recognized for Custody Services | $35,343 | $28,547 | $61,966 | $59,181
Amount of Custody Services Waived | $- | $- | $- | $762
Amount Recognized for Distribution Services | $13,564 | $15,075 | $27,301 | $33,097
Amount of Distribution Services Waived | $- | $- | $- | $3,679
Amount Recognized for Brokerage Commissions | $5,301 | $20,470 | $18,768 | $41,310
Amount of Brokerage Commissions Waived | $- | $- | $- | $-
Amount Recognized for Wilmington Trust | $- | $- | $- | $-
Amount of Wilmington Trust Waived | $- | $- | $- | $-
Amount Recognized for Marketing Agent | $6,236 | $- | $6,236 | $-
Amount of Marketing Agent Waived | $- | $- | $- | $-

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Note 3 – Summary of Significant Accounting Policies
Basis of Presentation
The accompanying financial statements have been prepared in accordance 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.
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 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 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 financial statements and reflected in cash and cash equivalents on the statements of assets and liabilities and 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 statements of operations.
Beginning in February of 2019, the Sponsor began investing a portion of the cash held by the broker in short term Treasury Bills as collateral for open futures contracts. 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.
The Sponsor adopted ASC 606, Revenue from Contracts With Customers, for the year ended December 31, 2018. The adoption did not have a material impact on the financial statements of the Trust or the Funds.
Brokerage Commissions
Brokerage commissions on all open commodity futures contracts are accrued on the trade date and on a full-turn basis.
Income Taxes
For federal income tax purposes, the Fund will be treated as a publicly traded partnership. A publicly traded partnership is generally treated as a corporation for federal income tax purposes unless 90% or more of the publicly traded partnership’s gross income for each taxable year of its existence consists of qualifying income as defined in section 7704(d) of the Internal Revenue Code of 1986, as amended. Qualifying income is defined as generally including, in pertinent part, interest (other than from a financial business), dividends, and gains from the sale or disposition of capital assets held for the production of interest or dividends. In the case of a partnership of which a principal activity is the buying and selling of commodities, other than as inventory, or of futures, forwards and options with respect to commodities, qualifying income also includes income and gains from commodities and from futures, forwards, options with respect to commodities and, provided the partnership is a trader or investor with respect to such assets, swaps and other notional principal contracts with respect to commodities. The Fund expects that at least 90% of the Fund’s gross income for each taxable year will consist of qualifying income and that the Fund will be taxed as a partnership for federal income tax purposes. The Fund does not record a provision for income taxes because the shareholders report their share of the Fund’s income or loss on their income tax returns. The financial statements reflect the Fund’s transactions without adjustment, if any, required for income tax purposes.
The Fund is 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 Fund files an income tax return in the U.S. federal jurisdiction, and may file income tax returns in various U.S. states and foreign jurisdictions. For all tax years 2016 to 2018, the Fund remains 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 Fund recording a tax liability that reduces net assets. Based on its analysis, the Fund has determined that it has not incurred any liability for unrecognized tax benefits as of June 30, 2019 and for the years ended December 31, 2018, 2017, and 2016. However, the Fund’s 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 Fund recognizes 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 six months ended June 30, 2019 and 2018.
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The Fund 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 Fund’s 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 Fund and did not have a significant impact on the financial statements of the Fund.
Creations and Redemptions
Authorized Purchasers may purchase Creation Baskets consisting of 25,000 shares from CORN. 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 the Fund only in blocks of 25,000 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.
The 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 Fund’s statements of assets and liabilities as receivable for shares sold. Amounts payable to Authorized Purchasers upon redemption are reflected in the Fund’s statements of assets and liabilities as payable for shares redeemed.
As outlined in the most recent Form S-1 filing, 50,000 shares represents two Redemption Baskets for the Fund and a minimum level of shares. If the 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.
Allocation of Shareholder Income and Losses
Profit or loss is allocated among the shareholders of the Fund in proportion to the number of shares each shareholder holds as of the close of each month.
Cash and Cash Equivalents
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 February 2019, the Sponsor began investing a portion of the cash held by the broker in short term Treasury Bills as collateral for open futures contracts, which is classified as a cash equivalent and is not FDIC insured.

| June 30, 2019 | December 31, 2018
Money Market Funds | $101 | $100
Demand Deposit Savings Accounts | 47,197,703 | 23,974,336
Commercial Paper | 47,398,493 | 34,935,697
Treasury Bills | 3,823,860 | -
Total cash and cash equivalents as presented on the Statement of Assets and Liabilities | $98,420,157 | $58,910,133

Payable for Purchases of Commercial Paper
The amount recorded by the Fund for commercial paper transactions awaiting settlement, which represents the amount payable for contracts purchased but not yet settled as of the reporting date. The value of the contract is included in cash and cash equivalents, and the payable amount is included as a liability.
Due from/to Broker
The amount recorded by the Fund 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.
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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 Fund’s 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 counterparties, so the counterparties 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 Fund’s trading, the Fund (and not its shareholders personally) is 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.
Calculation of Net Asset Value
The Fund’s NAV is calculated by:

| ● | Taking the current market value of its total assets and

| ● | Subtracting any liabilities.

The administrator, Fund Services, calculates the NAV of the Fund once each trading day. It calculates the NAV as of the earlier of the close of the NYSE or 4:00 p.m. New York time. The NAV for a particular trading day is released after 4:15 p.m. New York time.
In determining the value of Corn Futures Contracts, the administrator uses the CBOT closing price. The administrator determines the value of all other Fund investments as of the earlier of the close of the NYSE or 4:00 p.m. New York time. The value of over-the-counter corn interests is determined based on the value of the commodity or futures contract underlying such corn interest, except that a fair value may be determined if the Sponsor believes that the Fund is subject to significant credit risk relating to the counterparty to such corn interest. For purposes of financial statements and reports, the Sponsor will recalculate the NAV where necessary to reflect the “fair value” of a Futures Contract when the Futures Contract closes at its price fluctuation limit for the day. Short term Treasury securities held by the Fund are valued by the administrator using values received from recognized third-party vendors and dealer quotes. NAV includes any unrealized profit or loss on open corn interests and any other income or expense accruing to the Fund but unpaid or not received by the Fund.
Sponsor Fee, Allocation of Expenses and Related Party Transactions
The Sponsor is responsible for investing the assets of the Fund in accordance with the objectives and policies of the 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 Fund is 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 Fund generally pays 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 Fund also pays its portion of 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 funds based on activity drivers deemed most appropriate by the Sponsor for such expenses, including but not limited to relative assets under management and creation order activity.
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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 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 Funds, which are primarily the cost of performing accounting and financial reporting, regulatory compliance, and trading activities that are directly attributable to the Fund. Such expenses are primarily recorded as distribution and marketing fees on the statement of operations. All asset-based fees and expenses for the Funds are calculated on the prior day’s net assets.

| Three months ended June 30, 2019 | Three months ended June 30, 2018 | Six months ended June 30, 2019 | Six months ended June 30, 2018
Recognized Related Party Transactions | $165,828 | $181,538 | $415,411 | $555,526
Waived Related Party Transactions | $- | $48,225 | $4,500 | $70,829

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
Three months ended June 30, 2019 | $-
Three months ended June 30, 2018 | $98,041
Six months ended June 30, 2019 | $5,639
Six months ended June 30, 2018 | $138,723

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 Fund uses various valuation approaches. In accordance with 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 Fund. Unobservable inputs reflect the Fund’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 Fund has the ability to access. Valuation adjustments and block discounts are not applied to Level 1 financial instruments. Since valuations are based on quoted prices that are readily and regularly available in an active market, valuation of these financial instruments 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.
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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 Fund’s own assumptions are set to reflect those that market participants would use in pricing the asset or liability at the measurement date. The Fund uses prices and inputs that are current as of the measurement date, including during periods of market dislocation. In periods of market dislocation, the observability of prices and inputs may be reduced for many securities. 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 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 Net Asset Value (“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 June 30, 2019 and December 31, 2018, in the opinion of the Trust and the Fund, the reported value of the Corn Futures Contracts traded on the CBOT fairly reflected the value of the Corn Futures Contracts held by the Fund, and no adjustments were necessary. 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 Fund considers the average volume of the specific underlying futures contracts traded on the relevant exchange for the periods being reported.
For the three and six months ended June 30, 2019 and for the year ended December 31, 2018, the Fund did not have any significant transfers between any of the levels of the fair value hierarchy.
The Fund records its 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.
Expenses
Expenses are recorded using the accrual method of accounting.
Net Income (Loss) per Share
Net income (loss) per share is the difference between the NAV per unit at the beginning of each period and at the end of each period. The weighted average number of units outstanding was computed for purposes of disclosing net income (loss) per weighted average unit. The weighted average units are equal to the number of units outstanding at the end of the period, adjusted proportionately for units created or redeemed based on the amount of time the units were outstanding during such period.
New Accounting Pronouncements
The Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2019-04: “Codification Improvements to Topic 326, Financial Instruments – Credit Losses, Topic 815, Derivatives and hedging, and Topic 825, Financial Instruments.” The amendments clarify and improve areas of guidance related to the recently issued standards on credit losses, hedging, and recognition and measurement, specifically relating to ASU 2017-12. The amendments were adopted for the quarter ended June 30, 2019; the adoption did not have a material impact on the financial statements and disclosures of the Trust or the Fund.
The FASB issued ASU 2019-01: "Leases (Topic 842): Codification Improvements. These amendments align the guidance for fair value of underlying assets by lessors that are not manufacturers or dealers in Topic 842 with that of existing guidance. 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 but the amendment is not expected to have a material impact on the financial statements of the Trust or the Fund.
The FASB issued 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 Fund.
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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 Fund.
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 Fund.
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 were adopted for the quarter ended March 31, 2019; the adoption did not have a material impact on the financial statements and disclosures of the Trust or the Fund.
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 were adopted for the quarter ended March 31, 2019; the adoption did not have a material impact on the financial statements and disclosures of the Trust or the Fund.
Note 4 – Fair Value Measurements
The Fund’s assets and liabilities recorded at fair value have been categorized based upon a fair value hierarchy as described in the Fund’s significant accounting policies in Note 3. The following table presents information about the Fund’s assets and liabilities measured at fair value as of June 30, 2019 and December 31, 2018:
June 30, 2019

Assets: | Level 1 | Level 2 | Level 3 | Balance as of June 30, 2019
Cash Equivalents | $51,222,454 | $- | $- | $51,222,454
Corn futures contracts | 3,226,613 | - | - | 3,226,613
| $54,449,067 | $- | $- | $54,449,067

December 31, 2018

Assets: | Level 1 | Level 2 | Level 3 | Balance as of December 31, 2018
Cash equivalents | $34,935,797 | $- | $- | $34,935,797
Corn futures contracts | 107,363 | - | - | 107,363
Total | $35,043,160 | $- | $- | $35,043,160
Liabilities: | Level 1 | Level 2 | Level 3 | Balance as of December 31, 2018
Corn futures contracts | $1,297,288 | $- | $- | $1,297,288

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For the six months ended June 30, 2019 and year ended December 31, 2018, the Fund 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 Fund utilizes 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 Fund’s 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 Fund is also subject to additional counterparty risk due to inability of its counterparties to meet the terms of their contracts. For three and six months ended June 30, 2019 and year ended December 31, 2018, the Fund invested only in commodity futures contracts.
Futures Contracts
The Fund is subject to commodity price risk in the normal course of pursuing its 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 the Fund each day, depending on the daily fluctuations in the value of the contract, and are recorded as unrealized gains or losses by the Fund. Futures contracts may reduce the Fund’s exposure to counterparty risk since futures contracts are exchange-traded; and the exchange’s clearinghouse, as the counterparty 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 the 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 FASB 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 June 30, 2019 and December 31, 2018.
Offsetting of Financial Assets and Derivative Assets as of June 30, 2019

| (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 | Due to Broker | Net Amount
Commodity Price |  |  |  |  |  |
Corn futures contracts | $3,226,613 | $- | $3,226,613 | $- | $3,226,613 | $-

36
Offsetting of Financial Assets and Derivative Assets as of December 31, 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 | Due to Broker | Net Amount
Commodity Price |  |  |  |  |  |
Corn futures contracts | $107,363 | $- | $107,363 | $107,363 | $- | $-

Offsetting of Financial Liabilities and Derivative Liabilities as of December 31, 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 | Due from Broker | Net Amount
Commodity Price |  |  |  |  |  |
Corn futures contracts | $1,297,288 | $- | $1,297,288 | $107,363 | $1,189,925 | $-

The following tables identify the net gain and loss amounts included in the statements of operations as realized and unrealized gains and losses on trading of commodity futures contracts categorized by primary underlying risk:
Three months ended June 30, 2019

| Realized Loss on Commodity Futures Contracts | Net Change in Unrealized Appreciation on Commodity Futures Contracts
Primary Underlying Risk |  |
Commodity price |  |
Corn futures contracts | $(2,187,325) | $6,531,538

37
Three months ended June 30, 2018

| Realized Gain on Commodity Futures Contracts | Net Change in Unrealized Depreciation on Commodity Futures Contracts
Commodity Price |  |
Corn futures contracts | $1,931,575 | $(8,790,088)

Six months ended June 30, 2019

| Realized Loss on Commodity Futures Contracts | Net Change in Unrealized Appreciation on Commodity Futures Contracts
Commodity Price |  |
Corn futures contracts | $(3,093,050) | $4,416,538

Six months ended June 30, 2018

| Realized Gain on Commodity Futures Contracts | Net Change in Unrealized Depreciation on Commodity Futures Contracts
Commodity Price |  |
Corn futures contracts | $3,170,538 | $(4,809,338)

Volume of Derivative Activities
The average notional market value categorized by primary underlying risk for the futures contracts held was $78.9 million and $67.3 million, respectively, for the three and six months ended June 30, 2019 and $76.7 million and $73.3 million, respectively, for the three and six months ended June 30, 2018.
38
Note 6 – Financial Highlights
The following tables present per unit performance data and other supplemental financial data for the three and six months ended June 30, 2019 and 2018. This information has been derived from information presented in the financial statements and is presented with total expenses gross of expenses waived by the Sponsor and with total expenses net of expenses waived by the Sponsor, as appropriate.

| Three months ended June 30, 2019 | Three months ended June 30, 2018 | Six months ended June 30, 2019 | Six months ended June 30, 2018
Per Share Operation Performance |  |  |  |
Net asset value at beginning of period | $15.22 | $17.99 | $16.11 | $18.77
Income from investment operations: |  |  |  |
Investment income | 0.11 | 0.09 | 0.22 | 0.09
Net realized and unrealized gain (loss) on commodity futures contracts | 1.22 | (1.50) | 0.37 | 0.59
Total expenses, net | (0.15) | (0.15) | (0.30) | (0.36)
Net increase (decrease) in net asset value | 1.18 | (1.56) | 0.29 | 0.32
Net asset value at end of period | $16.40 | $16.43 | $16.40 | $19.09
Total Return | 7.75% | (8.67)% | 1.80% | 1.70%
Ratios to Average Net Assets (Annualized) |  |  |  |
Total expenses | 3.86% | 3.95% | 3.77% | 4.26%
Total expenses, net | 3.86% | 3.43% | 3.75% | 3.78%
Net investment loss | (1.17)% | (1.37)% | (1.06)% | (2.83)%

The financial highlights per share data are calculated consistent with the methodology used to calculate asset-based fees and expenses.
Note 7 – Organizational and Offering Costs
Expenses incurred in organizing of the Trust and the initial offering of the Shares of the Fund, including applicable SEC registration fees were borne directly by the Sponsor. The Fund will not be obligated to reimburse the Sponsor.
Note 8 – Subsequent Events
Management has evaluated the financial statements for the quarter-ended June 30, 2019 for subsequent events through the date of this filing and noted no material events requiring either recognition through the date of the filing or disclosure herein for the Fund.
39
TEUCRIUM SOYBEAN FUND
STATEMENTS OF ASSETS AND LIABILITIES

| June 30, 2019 | December 31, 2018
| (Unaudited) |
Assets |  |
Cash and cash equivalents | $32,295,237 | $26,774,939
Interest receivable | 203 | 4
Other assets | 73,657 | -
Equity in trading accounts: |  |
Commodity futures contracts | 1,431,225 | 228,400
Due from broker | - | 1,022,182
Total equity in trading accounts | 1,431,225 | 1,250,582
Total assets | 33,800,322 | 28,025,525
Liabilities |  |
Management fee payable to Sponsor | 26,473 | 24,973
Other liabilities | 14,110 | 19,285
Equity in trading accounts: |  |
Commodity futures contracts | - | 39,250
Due to broker | 738,351 | -
Total equity in trading accounts | 738,351 | 39,250
Total liabilities | 778,934 | 83,508
Net assets | $33,021,388 | $27,942,017
Shares outstanding | 2,100,004 | 1,725,004
Shares authorized | 9,725,000 | 10,350,000
Net asset value per share | $15.72 | $16.20
Market value per share | $15.73 | $16.18

The accompanying notes are an integral part of these financial statements.
40
TEUCRIUM SOYBEAN FUND
SCHEDULE OF INVESTMENTS
June 30, 2019
(Unaudited)

Description: Assets | Fair Value | Percentage of Net Assets | Shares
Cash equivalents |  |  |
Money market funds |  |  |
Fidelity Institutional Money Market Funds - Government Portfolio (cost $102) | $102 | 0.00% | 102
|  |  | Principal Amount
U.S. Treasury Obligations |  |  |
U.S. Treasury Bills 2.02% (cost: $1,056,070 due 7/30/2019) (a)(b) | 1,056,304 | 3.20 | 1,058,000
Commercial Paper |  |  |
Boston Scientific Corporation 2.77% (cost: $4,967,272 due 8/09/2019) | 4,985,159 | 15.10 | 5,000,000
Broadcom Inc. 2.67% (cost: $2,495,031 due 7/16/2019) | 2,497,240 | 7.56 | 2,500,000
Enable Midstream Partners, LP 2.93% (cost: $2,488,521 due 7/24/2019) | 2,495,368 | 7.56 | 2,500,000
General Motors Financial Company, Inc. 2.67% (cost: $2,495,767 due 7/10/2019) | 2,498,343 | 7.57 | 2,500,000
General Motors Financial Company, Inc. 2.68% (cost: $2,485,094 due 9/03/2019) | 2,488,222 | 7.53 | 2,500,000
Total Commercial Paper (cost: $14,931,685) | 14,964,332 | 45.32 |
Total cash equivalents | $16,020,738 | 48.52% |
|  |  | Notional Amount
|  |  | (Long Exposure)
Commodity futures contracts |  |  |
United States soybean futures contracts |  |  |
CBOT soybean futures NOV19 (250 contracts) | $496,100 | 1.50% | $11,537,500
CBOT soybean futures JAN20 (212 contacts) | 887,625 | 2.69 | 9,905,700
CBOT soybean futures NOV20 (244 contracts) | 47,500 | 0.14 | 11,608,300
Total commodity futures contracts | $1,431,225 | 4.33% | $33,051,500

(a) Discount yield at the time of purchase.
(b) All of the security is held by the broker as collateral for open futures contracts.
The accompanying notes are an integral part of these financial statements.
41
TEUCRIUM SOYBEAN FUND
SCHEDULE OF INVESTMENTS
December 31, 2018

|  | Percentage of |
Description: Assets | Fair Value | Net Assets | Shares
Cash equivalents |  |  |
Money market funds |  |  |
Fidelity Institutional Money Market Funds - Government Portfolio (cost $100) | $100 | 0.00% | 100
|  |  | Principal Amount
Commercial Paper |  |  |
CNH Industrial Capital LLC 2.63% (cost: $2,484,833 due 1/10/2019) | $2,498,375 | 8.94% | 2,500,000
Enbridge Energy Partners, L.P. 2.96% (cost: $2,490,844 due 1/10/2019) | 2,498,169 | 8.94 | 2,500,000
Energy Transfer Operating, L.P. 2.80% (cost: $4,986,486 due 1/4/2019) | 4,998,842 | 17.89 | 5,000,000
Enbridge Energy Partners, L.P. 2.98% (cost: $2,491,806 due 1/15/2019) | 2,497,132 | 8.94 | 2,500,000
Total Commercial Paper (cost: $12,453,969) | 12,492,518 | 44.71 |
Total Cash Equivalents | $12,492,618 | 44.71% |
|  |  | Notional Amount
|  |  | (Long Exposure)
Commodity futures contracts |  |  |
United States soybean futures contracts |  |  |
CBOT soybean futures MAR19 (218 contracts) | $228,400 | 0.82% | $9,755,500
|  |  | Notional Amount
Description: Liabilities | Fair Value | Percentage of Net Assets | (Long Exposure)
Commodity futures contracts |  |  |
United States soybean futures contracts |  |  |
CBOT soybean futures MAY19 (185 contracts) | $35,688 | 0.13% | $8,396,688
CBOT soybean futures NOV19 (209 contracts) | 3,562 | 0.01 | 9,773,363
Total commodity futures contracts | $39,250 | 0.14% | $18,170,051

The accompanying notes are an integral part of these financial statements.
42
TEUCRIUM SOYBEAN FUND
STATEMENTS OF OPERATIONS
(Unaudited)

| Three months ended | Three months ended | Six months ended | Six months ended
| June 30, 2019 | June 30, 2018 | June 30, 2019 | June 30, 2018
Income |  |  |  |
Realized and unrealized (loss) gain on trading of commodity futures contracts: |  |  |  |
Realized loss on commodity futures contracts | $(1,187,050) | $(2,413) | $(1,153,412) | $(80,012)
Net change in unrealized appreciation or (depreciation) on commodity futures contracts | 1,746,950 | (2,456,537) | 1,242,075 | (1,574,000)
Interest income | 184,260 | 80,841 | 352,252 | 130,656
Total income (loss) | 744,160 | (2,378,109) | 440,915 | (1,523,356)
Expenses |  |  |  |
Management fees | 69,242 | 40,572 | 132,005 | 70,757
Professional fees | 41,706 | 64,595 | 102,412 | 95,702
Distribution and marketing fees | 152,042 | 100,905 | 272,238 | 219,831
Custodian fees and expenses | 15,233 | 9,737 | 41,869 | 21,236
Business permits and licenses fees | 5,345 | 6,758 | 9,738 | 16,846
General and administrative expenses | 16,771 | 10,706 | 27,441 | 17,588
Brokerage commissions | 2,077 | 3,100 | 4,193 | 5,638
Other expenses | 692 | 3,910 | 2,051 | 8,535
Total expenses | 303,108 | 240,283 | 591,947 | 456,133
Expenses waived by the Sponsor | (33,391) | (84,485) | (96,303) | (184,427)
Total expenses, net | 269,717 | 155,798 | 495,644 | 271,706
Net income (loss) | $474,443 | $(2,533,907) | $(54,729) | $(1,795,062)
Net loss per share | $(0.07) | $(2.82) | $(0.48) | $(1.63)
Net income (loss) per weighted average share | $0.26 | $(2.85) | $(0.03) | $(2.32)
Weighted average shares outstanding | 1,807,971 | 888,740 | 1,682,463 | 774,452

The accompanying notes are an integral part of these financial statements.
43
TEUCRIUM SOYBEAN FUND
STATEMENTS OF CHANGES IN NET ASSETS
(Unaudited)

| Six months ended | Six months ended
| June 30, 2019 | June 30, 2018
Operations |  |
Net loss | $(54,729) | $(1,795,062)
Capital transactions |  |
Issuance of Shares | 9,251,550 | 9,873,695
Redemption of Shares | (4,117,450) | (1,313,363)
Total capital transactions | 5,134,100 | 8,560,332
Net change in net assets | 5,079,371 | 6,765,270
Net assets, beginning of period | $27,942,017 | $10,264,025
Net assets, end of period | $33,021,388 | $17,029,295
Net asset value per share at beginning of period | $16.20 | $17.85
Net asset value per share at end of period | $15.72 | $16.22
Creation of Shares | 625,000 | 550,000
Redemption of Shares | 250,000 | 75,000

The accompanying notes are an integral part of these financial statements.
44
TEUCRIUM SOYBEAN FUND
STATEMENTS OF CASH FLOWS
(Unaudited)

| Six months ended | Six months ended
| June 30, 2019 | June 30, 2018
Cash flows from operating activities: |  |
Net loss | $(54,729) | $(1,795,062)
Adjustments to reconcile net loss to net cash provided by (used in) operating activities: |  |
Net change in unrealized appreciation or (depreciation) on commodity futures contracts | (1,242,075) | 1,574,000
Changes in operating assets and liabilities: |  |
Due from broker | 1,022,182 | (1,836,078)
Interest receivable | (199) | 22
Other assets | (73,657) | (16,114)
Due to broker | 738,351 | -
Management fee payable to Sponsor | 1,500 | 907
Other liabilities | (5,175) | 3,143
Net cash provided by (used in) operating activities | 386,198 | (2,069,182)
Cash flows from financing activities: |  |
Proceeds from sale of Shares | 9,251,550 | 9,873,695
Redemption of Shares | (4,117,450) | (1,313,363)
Net cash provided by financing activities | 5,134,100 | 8,560,332
Net change in cash and cash equivalents | 5,520,298 | 6,491,150
Cash and cash equivalents beginning of period | 26,774,939 | 9,942,185
Cash and cash equivalents cash end of period | $32,295,237 | $16,433,335

The accompanying notes are an integral part of these financial statements.
45
NOTES TO FINANCIAL STATEMENTS
June 30, 2019
(Unaudited)
Note 1 – Organization and Operation
Teucrium Soybean Fund (referred to herein as “SOYB” or the “Fund”) is a commodity pool that is a series of Teucrium Commodity Trust (“Trust”), a Delaware statutory trust formed on September 11, 2009. The Fund issues common units, called the “Shares,” representing fractional undivided beneficial interests in the Fund. The Fund continuously offers Creation Baskets consisting of 25,000 Shares at their Net Asset Value (“NAV”) to “Authorized Purchasers” through Foreside Fund Services, LLC, which is the distributor for the Fund (the “Distributor”). Authorized Purchasers sell such Shares, which are listed on the New York Stock Exchange (“NYSE”) Arca under the symbol “SOYB,” to the public at per Share offering prices that reflect, among other factors, the trading price of the Shares on the NYSE Arca, the NAV of the Fund at the time the Authorized Purchaser purchased the Creation Baskets and the NAV at the time of the offer of the Shares to the public, the supply of and demand for Shares at the time of sale, and the liquidity of the markets for soybean interests. The Fund’s Shares trade in the secondary market on the NYSE Arca at prices that are lower or higher than their NAV per Share.
The investment objective of SOYB is to have the daily changes in percentage terms of the Shares’ Net Asset Value (“NAV”) reflect the daily changes in percentage terms of a weighted average of the closing settlement prices for three futures contracts for soybeans (“Soybeans Futures Contracts”) that are traded on the Chicago Board of Trade (“CBOT”):
SOYB Benchmark

CBOT Soybeans Futures Contract | Weighting
Second to expire (excluding August & September) | 35%
Third to expire (excluding August & September) | 30%
Expiring in the November following the expiration of the third-to-expire contract | 35%

The fund commenced investment operations on September 19, 2011 and has a fiscal year ending December 31. The Fund’s sponsor is Teucrium Trading, LLC (the “Sponsor”). The Sponsor is responsible for the management of the Fund. The Sponsor is a member of the National Futures Association (the “NFA”) and became a commodity pool operator 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.
On June 17, 2011, the initial Form S-1 for SOYB was declared effective by the SEC. On September 16, 2011, two Creation Baskets were issued representing 100,000 shares and $2,500,000. On September 19, 2011, SOYB started trading on the NYSE Arca. The current registration statements for SOYB was declared effective by the SEC on April 30, 2018. The registration statements for SOYB registered an additional 5,000,000 shares.
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 Fund’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 well as the most recent Form S-1 filing, as applicable. The operating results for the three and six months ended June 30, 2019 are not necessarily indicative of the results to be expected for the full year ending December 31, 2019.
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
The Sponsor employs U.S. Bank N.A. 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 doing business as U.S. Bank Global Fund Services ("Fund Services") is 615 E. Michigan Street, Milwaukee, WI 53202. In addition, effective on the Conversion Date, Fund Services, 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 Fund Services will receive an asset based fee, subject to a minimum annual fee.
46
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 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 statements of operations. A summary of these expenses is included below. Pursuant to a Consulting Services Agreement, Foreside Consulting Services, LLC, performs certain consulting support services for the Trust's Sponsor. Additionally, Foreside Distributors, LLC performs certain distribution consulting services pursuant to a Distribution Consulting Agreement with the Trust's Sponsor.
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 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 statements of operations. A summary of these expenses is included below.
The Sponsor employs Exchange Traded Concepts, LLC ("ETC") as the Marketing Agent, providing certain marketing consulting services in connection with the content strategy and e-mail marketing for the Funds. For its services as the Marketing Agent, ETC receives $5,000 a month and 0.02% of the Fund's average daily net assets, when assets are above the combined amount of $160 million. These services are recorded in distribution and marketing fees on the statements of the operations. A summary of these expenses is included below:

| Three months ended June 30, 2019 | Three months ended June 30, 2018 | Six months ended June 30, 2019 | Six months ended June 30, 2018
Amount Recognized for Custody Services | $15,233 | $9,737 | $41,869 | $21,236
Amount of Custody Services Waived | $- | $4,038 | $12,828 | $11,736
Amount Recognized for Distribution Services | $7,754 | $5,580 | $15,670 | $11,834
Amount of Distribution Services Waived | $- | $438 | $- | $4,533
Amount Recognized for Brokerage Commissions | $2,077 | $3,100 | $4,193 | $5,638
Amount of Brokerage Commissions Waived | $- | $- | $- | $-
Amount Recognized for Wilmington Trust | $- | $- | $- | $-
Amount of Wilmington Trust Waived | $- | $- | $- | $-
Amount Recognized for Marketing Agent | $3,329 | $- | $3,329 | $-
Amount of Marketing Agent Waived | $- | $- | $- | $-

47
Note 3 – Summary of Significant Accounting Policies
Basis of Presentation
The accompanying financial statements have been prepared in accordance 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.
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 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 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 February 2018, 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 financial statements and reflected in cash and cash equivalents on the statements of assets and liabilities and in cash, cash equivalents and restricted cash on the 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 statements of operations.
Beginning in February of 2019, the Sponsor began investing a portion of the cash held by the broker in short term Treasury Bills as collateral for open futures contracts. 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.
The Sponsor adopted ASC 606, Revenue from Contracts With Customers, for the year ended December 31, 2018. The adoption did not have a material impact on the financial statements of the Trust or the Funds.
Brokerage Commissions
Brokerage commissions on all open commodity futures contracts are accrued on the trade date and on a full-turn basis.
Income Taxes
For federal income tax purposes, the Fund will be treated as a publicly traded partnership. A publicly traded partnership is generally treated as a corporation for federal income tax purposes unless 90% or more of the publicly traded partnership’s gross income for each taxable year of its existence consists of qualifying income as defined in section 7704(d) of the Internal Revenue Code of 1986, as amended. Qualifying income is defined as generally including, in pertinent part, interest (other than from a financial business), dividends, and gains from the sale or disposition of capital assets held for the production of interest or dividends. In the case of a partnership of which a principal activity is the buying and selling of commodities, other than as inventory, or of futures, forwards and options with respect to commodities, qualifying income also includes income and gains from commodities and from futures, forwards, options with respect to commodities and, provided the partnership is a trader or investor with respect to such assets, swaps and other notional principal contracts with respect to commodities. The Fund expects that at least 90% of the Fund’s gross income for each taxable year will consist of qualifying income and that the Fund will be taxed as a partnership for federal income tax purposes. The Fund does not record a provision for income taxes because the shareholders report their share of the Fund’s income or loss on their income tax returns. The financial statements reflect the Fund’s transactions without adjustment, if any, required for income tax purposes.
The Fund is 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 Fund files an income tax return in the U.S. federal jurisdiction, and may file income tax returns in various U.S. states and foreign jurisdictions. For all tax years 2016 to 2018, the Fund remains 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 Fund recording a tax liability that reduces net assets. Based on its analysis, the Fund has determined that it has not incurred any liability for unrecognized tax benefits as of June 30, 2019 and for the years ended December 31, 2018, 2017, and 2016. However, the Fund’s 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 Fund recognizes 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 six months ended June 30, 2019 and 2018.
The Fund 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 Fund’s 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 Fund and did not have a significant impact on the financial statements of the Fund.
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Creations and Redemptions
Authorized Purchasers may purchase Creation Baskets consisting of 25,000 shares from the 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 the Fund only in blocks of 25,000 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.
The 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 Fund’s statements of assets and liabilities as receivable for shares sold. Amounts payable to Authorized Purchasers upon redemption are reflected in the Fund’s statements of assets and liabilities as payable for shares redeemed.
As outlined in the most recent Form S-1 filing, 50,000 shares represents two Redemption Baskets for the Fund and a minimum level of shares. If the 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.
Allocation of Shareholder Income and Losses
Profit or loss is allocated among the shareholders of the Fund in proportion to the number of shares each shareholder holds as of the close of each month.
Cash and Cash Equivalents
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 first quarter 2018, 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 February 2019, the Sponsor began investing a portion of the cash held by the broker in short term Treasury Bills as collateral for open futures contracts, which is classified as a cash equivalent and is not FDIC insured.
49

| June 30, 2019 | December 31, 2018
Money Market Funds | $102 | $100
Demand Deposit Savings Accounts | 16,274,499 | 14,282,321
Commercial Paper | 14,964,332 | 12,492,518
Treasury Bills | 1,056,304 | -
Total cash and cash equivalents as presented on the Statement of Assets and Liabilities | $32,295,237 | $26,774,939

Due from/to Broker
The amount recorded by the Fund 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 Fund’s 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 counterparties, so the counterparties may agree to require the posting of collateral by one or both parties to address credit exposure.
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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 Fund’s trading, the Fund (and not its shareholders personally) is 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.
Calculation of Net Asset Value
The Fund’s NAV is calculated by:

| ● | Taking the current market value of its total assets and

| ● | Subtracting any liabilities.

The administrator, Fund Services, calculates the NAV of the Fund once each trading day. It calculates the NAV as of the earlier of the close of the NYSE or 4:00 p.m. New York time. The NAV for a particular trading day is released after 4:15 p.m. New York time.
In determining the value of Soybean Futures Contracts, the administrator uses the CBOT closing price. The administrator determines the value of all other Fund investments as of the earlier of the close of the NYSE or 4:00 p.m. New York time. The value of over-the-counter soybean interests is determined based on the value of the commodity or futures contract underlying such soybean interest, except that a fair value may be determined if the Sponsor believes that the Fund is subject to significant credit risk relating to the counterparty to such soybean interest. For purposes of financial statements and reports, the Sponsor will recalculate the NAV where necessary to reflect the “fair value” of a Futures Contract when the Futures Contract closes at its price fluctuation limit for the day. Short term Treasury securities held by the Fund are valued by the administrator using values received from recognized third-party vendors and dealer quotes. NAV includes any unrealized profit or loss on open soybean interests and any other income or expense accruing to the Fund but unpaid or not received by the Fund.
Sponsor Fee, Allocation of Expenses and Related Party Transactions
The Sponsor is responsible for investing the assets of the Fund in accordance with the objectives and policies of the 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 Fund is 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 Fund generally pays 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 Fund also pays its portion of 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 funds based on activity drivers deemed most appropriate by the Sponsor for such expenses, including but not limited to relative assets under management and creation 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 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 Funds, which are primarily the cost of performing accounting and financial reporting, regulatory compliance, and trading activities that are directly attributable to the Fund. Such expenses are primarily recorded as distribution and marketing fees on the statement of operations. All asset-based fees and expenses for the Funds are calculated on the prior day’s net assets.
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| Three months ended June 30, 2019 | Three months ended June 30, 2018 | Six months ended June 30, 2019 | Six months ended June 30, 2018
Recognized Related Party Transactions | $92,608 | $67,716 | $235,850 | $194,552
Waived Related Party Transactions | $15,831 | $30,681 | $31,537 | $89,494

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:

| SOYB
Three months ended June 30, 2019 | $33,391
Three months ended June 30, 2018 | $84,485
Six months ended June 30, 2019 | $96,303
Six months ended June 30, 2018 | $184,427

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 Fund 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 Fund. Unobservable inputs reflect the Fund’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 Fund has the ability to access. Valuation adjustments and block discounts are not applied to Level 1 financial instruments. Since valuations are based on quoted prices that are readily and regularly available in an active market, valuation of these financial instruments 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.
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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 Fund’s own assumptions are set to reflect those that market participants would use in pricing the asset or liability at the measurement date. The Fund 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. 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 June 30, 2019 and December 31, 2018, in the opinion of the Trust and the Fund, the reported value of the Soybean Futures Contracts traded on the CBOT fairly reflected the value of the Soybean Futures Contracts held by the Fund, with no adjustments necessary. 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 Fund considers the average volume of the specific underlying futures contracts traded on the relevant exchange for the periods being reported.
For the three and six months ended June 30, 2019 and for the year ended December 31, 2018, the Fund did not have any significant transfers between any of the levels of the fair value hierarchy.
The Fund records its 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.
Expenses
Expenses are recorded using the accrual method of accounting.
Net Income (Loss) per Share
Net income (loss) per Share is the difference between the NAV per unit at the beginning of each period and at the end of each period. The weighted average number of Shares outstanding was computed for purposes of disclosing net income (loss) per weighted average Share. The weighted average Shares are equal to the number of Shares outstanding at the end of the period, adjusted proportionately for Shares created or redeemed based on the amount of time the Shares were outstanding during such period.
New Accounting Pronouncements
The Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2019-04: “Codification Improvements to Topic 326, Financial Instruments – Credit Losses, Topic 815, Derivatives and hedging, and Topic 825, Financial Instruments.” The amendments clarify and improve areas of guidance related to the recently issued standards on credit losses, hedging, and recognition and measurement, specifically relating to ASU 2017-12. The amendments were adopted for the quarter ended June 30, 2019; the adoption did not have a material impact on the financial statements and disclosures of the Trust or the Fund.
The FASB issued ASU 2019-01: "Leases (Topic 842): Codification Improvements. These amendments align the guidance for fair value of underlying assets by lessors that are not manufacturers or dealers in Topic 842 with that of existing guidance. 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 but the amendment is not expected to have a material impact on the financial statements of the Trust or the Fund.
The FASB issued 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 Fund.
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 Fund.
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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 Fund.
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 were adopted for the quarter ended March 31, 2019; the adoption did not have a material impact on the financial statements and disclosures of the Trust or the Fund.
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 were adopted for the quarter ended March 31, 2019; the adoption did not have a material impact on the financial statements and disclosures of the Trust or the Fund.
Note 4 – Fair Value Measurements
The Fund’s assets and liabilities recorded at fair value have been categorized based upon a fair value hierarchy as described in the Fund’s significant accounting policies in Note 3. The following table presents information about the Fund’s assets and liabilities measured at fair value as of June 30, 2019 and December 31, 2018:
June 30, 2019

Assets: | Level 1 | Level 2 | Level 3 | Balance as of June 30, 2019
Cash Equivalents | $16,020,738 | $- | $- | $16,020,738
Soybeans futures contracts | 1,431,225 | - | - | 1,431,225
Total | $17,451,963 | $- | $- | $17,451,963

December 31, 2018

Assets: | Level 1 | Level 2 | Level 3 | Balance as of December 31, 2018
Cash Equivalents | $12,492,618 | $- | $- | $12,492,618
Soybeans futures contracts | 228,400 | - | - | 228,400
Total | $12,721,018 | $- | $- | $12,721,018
Liabilities: | Level 1 | Level 2 | Level 3 | Balance as of December 31, 2018
Soybeans futures contracts | $39,250 | $- | $- | $39,250

For the three and six months ended June 30, 2019 and year ended December 31, 2018, the Fund 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.
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Note 5 – Derivative Instruments and Hedging Activities
In the normal course of business, the Fund utilizes 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 Fund’s 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 Fund is also subject to additional counterparty risk due to inability of its counterparties to meet the terms of their contracts. For the three and six months ended June 30, 2019 and year ended December 31, 2018, the Fund invested only in commodity futures contracts.
Futures Contracts
The Fund is subject to commodity price risk in the normal course of pursuing its 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 the Fund each day, depending on the daily fluctuations in the value of the contract, and are recorded as unrealized gains or losses by the Fund. Futures contracts may reduce the Fund’s exposure to counterparty risk since futures contracts are exchange-traded; and the exchange’s clearinghouse, as the counterparty 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 the 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 FASB 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 June 30, 2019 and December 31, 2018.
Offsetting of Financial Assets and Derivative Assets as of June 30, 2019

| (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 | Due to Broker | Net Amount
Commodity Price |  |  |  |  |  |
Soybeans futures contracts | $1,431,225 | $- | $1,431,225 | $- | $738,351 | $692,874

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Offsetting of Financial Assets and Derivative Assets as of December 31, 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 | Due to Broker | Net Amount
Commodity Price |  |  |  |  |  |
Soybeans futures contracts | $228,400 | $- | $228,400 | $39,250 | $- | $189,150

Offsetting of Financial Liabilities and Derivative Liabilities as of December 31, 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 | Due from Broker | Net Amount
Commodity Price |  |  |  |  |  |
Soybeans futures contracts | $39,250 | $- | $39,250 | $39,250 | $- | $-

The following is a summary of realized and unrealized gains and losses of the derivative instruments utilized by the Fund:
Three months ended June 30, 2019

| Realized Loss on Commodity Futures Contracts | Net Change in Unrealized Appreciation on Commodity Futures Contracts
Commodity Price |  |
Soybeans futures contracts | $(1,187,050) | $1,746,950

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Three months ended June 30, 2018

| Realized Loss on Commodity Futures Contracts | Net Change in Unrealized (Depreciation on Commodity Futures Contracts
Commodity Price |  |
Soybeans futures contracts | $(2,413) | $(2,456,537)

Six months ended June 30, 2019

| Realized Loss on Commodity Futures Contracts | Net Change in Unrealized Appreciation on Commodity Futures Contracts
Commodity Price |  |
Soybeans futures contracts | $(1,153,412) | $1,242,075

Six months ended June 30, 2018

| Realized Loss on Commodity Futures Contracts | Net Change in Unrealized Depreciation on Commodity Futures Contracts
Commodity Price |  |
Soybeans futures contracts | $(80,012) | $(1,574,000)

Volume of Derivative Activities
The average notional market value categorized by primary underlying risk for all futures contracts held was $29.4 million and $26.8 million, respectively for the three and six months ended June 30, 2019 and $17.0 million and $15.1 million, respectively, for the three and six months ended June 30, 2018.
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Note 6 – Financial Highlights
The following tables present per unit performance data and other supplemental financial data for the three and six months ended June 30, 2019 and 2018. This information has been derived from information presented in the financial statements. This information has been derived from information presented in the financial statements and is presented with total expenses gross of expenses waived by the Sponsor and with total expenses net of expenses waived by the Sponsor, as appropriate.

| Three months ended June 30, 2019 | Three months ended June 30, 2018 | Six months ended June 30, 2019 | Six months ended June 30, 2018
Per Share Operation Performance |  |  |  |
Net asset value at beginning of period | $15.79 | $19.04 | $16.20 | $17.85
Income from investment operations: |  |  |  |
Investment income | 0.10 | 0.09 | 0.21 | 0.17
Net realized and unrealized loss on commodity futures contracts | (0.02) | (2.74) | (0.39) | (1.45)
Total expenses, net | (0.15) | (0.17) | (0.30) | (0.35)
Net decrease in net asset value | (0.07) | (2.82) | (0.48) | (1.63)
Net asset value at end of period | $15.72 | $16.22 | $15.72 | $16.22
Total Return | (0.44)% | (14.81)% | (2.96)% | (9.13)%
Ratios to Average Net Assets (Annualized) |  |  |
Total expenses | 4.38% | 5.92% | 4.48% | 6.45%
Total expenses, net | 3.90 | 3.84% | 3.75% | 3.84%
Net investment loss | (1.24)% | (1.85)% | (1.08)% | (1.99)%

The financial highlights per share data are calculated consistent with the methodology used to calculate asset-based fees and expenses.
Note 7 – Organizational and Offering Costs
Expenses incurred in organizing of the Trust and the initial offering of the Shares of the Fund, including applicable SEC registration fees were borne directly by the Sponsor. The Fund will not be obligated to reimburse the Sponsor.
Note 8 – Subsequent Events
Management has evaluated the financial statements for the quarter-ended June 30, 2019 for subsequent events through the date of this filing and noted no material events requiring either recognition through the date of the filing or disclosure herein for the Fund.
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TEUCRIUM SUGAR FUND
STATEMENTS OF ASSETS AND LIABILITIES

| June 30, 2019 | December 31, 2018
| (Unaudited) |
Assets |  |
Cash and cash equivalents | $9,771,611 | $10,261,941
Interest receivable | 76 | 90
Other assets | 67,805 | 4,621
Equity in trading accounts: |  |
Commodity futures contracts | 77,426 | 233,979
Due from broker | 129,680 | 351,972
Total equity in trading accounts | 207,106 | 585,951
Total assets | 10,046,598 | 10,852,603
Liabilities |  |
Management fee payable to Sponsor | 8,144 | 9,918
Other liabilities | 3,484 | 16,290
Equity in trading accounts: |  |
Commodity futures contracts | 100,196 | 47,656
Total liabilities | 111,824 | 73,864
Net assets | $9,934,774 | $10,778,739
Shares outstanding | 1,400,004 | 1,525,004
Shares authorized | 10,225,000 | 10,525,000
Net asset value per share | $7.10 | $7.07
Market value per share | $7.09 | $7.09

The accompanying notes are an integral part of these financial statements.
59
TEUCRIUM SUGAR FUND
SCHEDULE OF INVESTMENTS
June 30, 2019
(Unaudited)

Description: Assets | Fair Value | Percentage of Net Assets | Shares
Cash equivalents |  |  |
Money market funds |  |  |
Fidelity Institutional Money Market Funds - Government Portfolio (cost $102) | $102 | 0.00% | 102
|  |  | Principal Amount
U.S. Treasury Obligations |  |  |
U.S. Treasury Bills 2.02% (cost: $550,993 due 7/30/2019) (a)(b) | 551,115 | 5.55 | 552,000
Commercial Paper |  |  |
General Motors Financial 2.67% (cost: $2,495,767 due 7/10/2019) | 2,498,343 | 25.15 | 2,500,000
Total cash equivalents | $3,049,560 | 30.70% |
|  |  | Notional Amount
|  |  | (Long Exposure)
Commodity futures contracts |  |  |
United States sugar futures contracts |  |  |
ICE sugar futures MAR20 (228 contracts) | $77,426 | 0.78% | $3,460,128
|  |  | Notional Amount
Description: Liabilities | Fair Value | Percentage of Net Assets | (Long Exposure)
Commodity futures contracts |  |  |
United States sugar futures contracts |  |  |
ICE sugar futures MAY20 (195 contracts) | $12,869 | 0.13% | $2,976,792
ICE sugar futures MAR21 (219 contracts) | 87,327 | 0.88 | 3,492,787
Total commodity futures contracts | $100,196 | 1.01% | $6,469,579

(a) Discount yield at the time of purchase.
(b) All of the security is held by the broker as collateral for open futures contracts.
The accompanying notes are an integral part of these financial statements.
60
TEUCRIUM SUGAR FUND
SCHEDULE OF INVESTMENTS
December 31, 2018

|  | Percentage of |
Description: Assets | Fair Value | Net Assets | Shares
Cash equivalents |  |  |
Money market funds |  |  |
Fidelity Institutional Money Market Funds - Government Portfolio (cost $100) | $100 | 0.00% | 100
|  |  | Principal Amount
Commercial Paper |  |  |
Enbridge Energy Partners, L.P. 2.98% (cost: $2,491,806 due 1/15/2019) | 2,497,132 | 23.17 | 2,500,000
Total Cash Equivalents | $2,497,232 | 23.17% |
|  |  | Notional Amount
|  |  | (Long Exposure)
Commodity futures contracts |  |  |
United States sugar futures contracts |  |  |
ICE sugar futures MAY19 (278 contracts) | $29,254 | 0.27% | $3,767,456
ICE sugar futures JUL19 (235 contracts) | 204,725 | 1.90 | 3,221,568
Total commodity futures contracts | $233,979 | 2.17% | $6,989,024
|  |  | Notional Amount
Description: Liabilities | Fair Value | Percentage of Net Assets | (Long Exposure)
Commodity futures contracts |  |  |
United States sugar futures contracts |  |  |
ICE sugar futures MAR20 (257 contracts) | $47,656 | 0.44% | $3,785,096

The accompanying notes are an integral part of these financial statements.
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TEUCRIUM SUGAR FUND
STATEMENTS OF OPERATIONS
(Unaudited)

| Three months ended | Three months ended | Six months ended | Six months ended
| June 30, 2019 | June 30, 2018 | June 30, 2019 | June 30, 2018
Income |  |  |  |
Realized and unrealized gain (loss) on trading of commodity futures contracts: |  |  |  |
Realized (loss) income on commodity futures contracts | $(68,701) | $(1,028,754) | $292,667 | $(1,297,867)
Net change in unrealized (depreciation) or appreciation on commodity futures contracts | (269,125) | 278,275 | (209,093) | (608,462)
Interest income | 66,268 | 60,762 | 132,892 | 88,679
Total (loss) income | (271,558) | (689,717) | 216,466 | (1,817,650)
Expenses |  |  |  |
Management fees | 25,463 | 31,337 | 51,596 | 48,847
Professional fees | 30,695 | 54,713 | 77,144 | 81,215
Distribution and marketing fees | 62,696 | 66,683 | 108,287 | 131,876
Custodian fees and expenses | 10,500 | 10,754 | 15,726 | 17,945
Business permits and licenses fees | 4,449 | 3,299 | 8,891 | 19,546
General and administrative expenses | 15,994 | 7,618 | 20,298 | 11,742
Brokerage commissions | 1,528 | 4,464 | 3,471 | 6,633
Other expenses | 601 | 3,289 | 1,551 | 6,328
Total expenses | 151,926 | 182,157 | 286,964 | 324,132
Expenses waived by the Sponsor | (57,954) | (66,209) | (99,436) | (146,899)
Total expenses, net | 93,972 | 115,948 | 187,528 | 177,233
Net (loss) income | $(365,530) | $(805,665) | $28,938 | $(1,994,883)
Net (loss) income per share | $(0.20) | $(0.67) | $0.03 | $(2.17)
Net (loss) income per weighted average share | $(0.26) | $(0.50) | $0.02 | $(1.65)
Weighted average shares outstanding | 1,432,147 | 1,623,905 | 1,429,976 | 1,212,435

The accompanying notes are an integral part of these financial statements.
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TEUCRIUM SUGAR FUND
STATEMENTS OF CHANGES IN NET ASSETS
(Unaudited)

| Six months ended | Six months ended
| June 30, 2019 | June 30, 2018
Operations |  |
Net income (loss) | $28,938 | $(1,994,883)
Capital transactions |  |
Issuance of Shares | 2,184,937 | 11,064,135
Redemption of Shares | (3,057,840) | (581,370)
Total capital transactions | (872,903) | 10,482,765
Net change in net assets | (843,965) | 8,487,882
Net assets, beginning of period | $10,778,739 | $6,363,710
Net assets, end of period | $9,934,774 | $14,851,592
Net asset value per share at beginning of period | $7.07 | $9.79
Net asset value per share at end of period | $7.10 | $7.62
Creation of Shares | 300,000 | 1,375,000
Redemption of Shares | 425,000 | 75,000

The accompanying notes are an integral part of these financial statements.
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TEUCRIUM SUGAR FUND
STATEMENTS OF CASH FLOWS
(Unaudited)

| Six months ended | Six months ended
| June 30, 2019 | June 30, 2018
Cash flows from operating activities: |  |
Net income (loss) | $28,938 | $(1,994,883)
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities: |  |
Net change in unrealized (depreciation) or appreciation on commodity futures contracts | 209,093 | 608,462
Changes in operating assets and liabilities: |  |
Due from broker | 222,292 | (1,292,296)
Interest receivable | 14 | 47
Other assets | (63,184) | (14,171)
Management fee payable to Sponsor | (1,774) | 6,675
Other liabilities | (12,806) | 12,833
Net cash provided by (used in) operating activities | 382,573 | (2,673,333)
Cash flows from financing activities: |  |
Proceeds from sale of Shares | 2,184,937 | 11,064,135
Redemption of Shares | (3,057,840) | (581,370)
Net cash (used in) provided by financing activities | (872,903) | 10,482,765
Net change in cash and cash equivalents | (490,330) | 7,809,432
Cash and cash equivalents beginning of period | 10,261,941 | 5,929,275
Cash and cash equivalents end of period | $9,771,611 | $13,738,707

The accompanying notes are an integral part of these financial statements.
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NOTES TO FINANCIAL STATEMENTS
June 30, 2019
(Unaudited)
Note 1 – Organization and Operation
Teucrium Sugar Fund (referred to herein as “CANE” or the “Fund”) is a commodity pool that is a series of Teucrium Commodity Trust (“Trust”), a Delaware statutory trust formed on September 11, 2009. The Fund issues common units, called the “Shares,” representing fractional undivided beneficial interests in the Fund. The Fund continuously offers Creation Baskets consisting of 25,000 Shares at their Net Asset Value (“NAV”) to “Authorized Purchasers” through Foreside Fund Services, LLC, which is the distributor for the Fund (the “Distributor”). Authorized Purchasers sell such Shares, which are listed on the New York Stock Exchange (“NYSE”) Arca under the symbol “CANE,” to the public at per-Share offering prices that reflect, among other factors, the trading price of the Shares on the NYSE Arca, the NAV of the Fund at the time the Authorized Purchaser purchased the Creation Baskets and the NAV at the time of the offer of the Shares to the public, the supply of and demand for Shares at the time of sale, and the liquidity of the markets for sugar interests. The Fund’s Shares trade in the secondary market on the NYSE Arca at prices that are lower or higher than their NAV per Share.
The investment objective of CANE is to have the daily changes in percentage terms of the Shares’ Net Asset Value (“NAV”) reflect the daily changes in percentage terms of a weighted average of the closing settlement prices for three futures contracts for No. 11 sugar (“Sugar Futures Contracts”) that are traded on the ICE Futures US (“ICE Futures”):
CANE Benchmark

ICE Sugar Futures Contract | Weighting
Second to expire | 35%
Third to expire | 30%
Expiring in the March following the expiration of the third-to-expire contract | 35%

The Fund commenced investment operations on September 19, 2011 and has a fiscal year ending December 31. The Fund’s sponsor is Teucrium Trading, LLC (the “Sponsor”). The Sponsor is responsible for the management of the Fund. The Sponsor is a member of the National Futures Association (the “NFA”) and became a commodity pool operator 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.
On June 17, 2011, the initial Form S-1 for CANE was declared effective by the SEC. On September 16, 2011, two Creation Baskets were issued representing 100,000 shares and $2,500,000. On September 19, 2011, CANE started trading on the NYSE Arca. The current registration statements for CANE was declared effective by the SEC on April 30, 2018. The registration statements for CANE registered an additional 5,000,000 shares.
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 Fund’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 well as the most recent Form S-1 filing, as applicable. The operating results for the three and six months ended June 30, 2019 are not necessarily indicative of the results to be expected for the full year ending December 31, 2019.
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.
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Note 2 – Principal Contracts and Agreements
The Sponsor employs U.S. Bank N.A. 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 doing business as U.S. Bank Global Fund Services ("Fund Services") is 615 E. Michigan Street, Milwaukee, WI 53202. In addition, effective on the Conversion Date, Fund Services, 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 Fund Services 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 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 statements of operations. A summary of these expenses is included below. Pursuant to a Consulting Services Agreement, Foreside Consulting Services, LLC, performs certain consulting support services for the Trust's Sponsor. Additionally, Foreside Distributors, LLC performs certain distribution consulting services pursuant to a Distribution Consulting Agreement with the Trust's Sponsor.
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 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 statements of operations. A summary of these expenses is included below.
66
The Sponsor employs Exchange Traded Concepts, LLC ("ETC") as the Marketing Agent, providing certain marketing consulting services in connection with the content strategy and e-mail marketing for the Funds. For its services as the Marketing Agent, ETC receives $5,000 a month and 0.02% of the Fund's average daily net assets, when assets are above the combined amount of $160 million. These services are recorded in distribution and marketing fees on the statements of the operations. A summary of these expenses is included below:

| Three months ended June 30, 2019 | Three months ended June 30, 2018 | Six months ended June 30, 2019 | Six months ended June 30, 2018
Amount Recognized for Custody Services | $10,500 | $10,754 | $15,726 | $17,945
Amount of Custody Services Waived | $5,407 | $5,029 | $5,407 | $9,283
Amount Recognized for Distribution Services | $3,434 | $3,196 | $7,990 | $6,603
Amount of Distribution Services Waived | $2,078 | $1,317 | $3,443 | $3,553
Amount Recognized for Brokerage Commissions | $1,528 | $4,464 | $3,471 | $6,633
Amount of Brokerage Commissions Waived | $- | $- | $- | $-
Amount Recognized for Wilmington Trust | $- | $- | $- | $-
Amount of Wilmington Trust Waived | $- | $- | $- | $-
Amount Recognized for Marketing Agent | $1,232 | $- | $1,232 | $-
Amount of Marketing Agent Waived | $404 | $- | $404 | $-

Note 3 – Summary of Significant Accounting Policies
Basis of Presentation
The accompanying financial statements have been prepared in accordance 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.
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 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 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 February 2018, 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 financial statements and reflected in cash and cash equivalents on the statements of assets and liabilities and in cash, cash equivalents and restricted cash on the 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 statements of operations.
67
Beginning in February of 2019, the Sponsor began investing a portion of the cash held by the broker in short term Treasury Bills as collateral for open futures contracts. 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.
The Sponsor adopted ASC 606, Revenue from Contracts With Customers, for the year ended December 31, 2018. The adoption did not have a material impact on the financial statements of the Trust or the Funds.
Brokerage Commissions
Brokerage commissions on all open commodity futures contracts are accrued on the trade date and on a full-turn basis.
Income Taxes
For federal income tax purposes, the Fund will be treated as a publicly traded partnership. A publicly traded partnership is generally treated as a corporation for federal income tax purposes unless 90% or more of the publicly traded partnership’s gross income for each taxable year of its existence consists of qualifying income as defined in section 7704(d) of the Internal Revenue Code of 1986, as amended. Qualifying income is defined as generally including, in pertinent part, interest (other than from a financial business), dividends, and gains from the sale or disposition of capital assets held for the production of interest or dividends. In the case of a partnership of which a principal activity is the buying and selling of commodities, other than as inventory, or of futures, forwards and options with respect to commodities, qualifying income also includes income and gains from commodities and from futures, forwards, options with respect to commodities and, provided the partnership is a trader or investor with respect to such assets, swaps and other notional principal contracts with respect to commodities. The Fund expects that at least 90% of the Fund’s gross income for each taxable year will consist of qualifying income and that the Fund will be taxed as a partnership for federal income tax purposes. The Fund does not record a provision for income taxes because the shareholders report their share of the Fund’s income or loss on their income tax returns. The financial statements reflect the Fund’s transactions without adjustment, if any, required for income tax purposes.
The Fund is 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 Fund files an income tax return in the U.S. federal jurisdiction, and may file income tax returns in various U.S. states and foreign jurisdictions. For all tax years 2016 to 2018, the Fund remains 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 Fund recording a tax liability that reduces net assets. Based on its analysis, the Fund has determined that it has not incurred any liability for tax benefits as of June 30, 2019 and for the years ended December 31, 2018, 2017 and 2016. However, the Fund’s 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 Fund recognizes 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 six months ended June 30, 2019 and 2018.
The Fund 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 Fund’s 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 Fund and did not have a significant impact on the financial statements of the Fund.
Creations and Redemptions
Authorized Purchasers may purchase Creation Baskets consisting of 25,000 shares from the 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 the Fund only in blocks of 25,000 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.
The 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 Fund’s statements of assets and liabilities as receivable for shares sold. Amounts payable to Authorized Purchasers upon redemption are reflected in the Fund’s statements of assets and liabilities as payable for shares redeemed.
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As outlined in the most recent Form S-1 filing, 50,000 shares represents two Redemption Baskets for the Fund and a minimum level of shares. If the 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.
Allocation of Shareholder Income and Losses
Profit or loss is allocated among the shareholders of the Fund in proportion to the number of shares each shareholder holds as of the close of each month.
Cash and Cash Equivalents
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 first quarter 2018, 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 February 2019, the Sponsor began investing a portion of the cash held by the broker in short term Treasury Bills as collateral for open futures contracts, which is classified as a cash equivalent and is not FDIC insured.

| June 30, 2019 | December 31, 2018
Money Market Funds | $102 | $100
Demand Deposit Savings Accounts | 6,722,051 | 7,764,709
Commercial Paper | 2,498,343 | 2,497,132
Treasury Bills | 551,115 | -
Total cash and cash equivalents as presented on the Statement of Assets and Liabilities | $9,771,611 | $10,261,941

Due from/to Broker
The amount recorded by the Fund 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 Fund’s 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 counterparties, so the counterparties 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.
69
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 Fund’s trading, the Fund (and not its shareholders personally) is 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.
Calculation of Net Asset Value
The Fund’s NAV is calculated by:

| ● | Taking the current market value of its total assets and

| ● | Subtracting any liabilities.

The administrator, Fund Services, calculates the NAV of the Fund once each trading day. It calculates the NAV as of the earlier of the close of the NYSE or 4:00 p.m. New York time. The NAV for a particular trading day is released after 4:15 p.m. New York time.
In determining the value of Sugar Futures Contracts, the administrator uses the ICE closing price. The administrator determines the value of all other Fund investments as of the earlier of the close of the NYSE or 4:00 p.m. New York time. The value of over-the-counter sugar interests is determined based on the value of the commodity or futures contract underlying such sugar interest, except that a fair value may be determined if the Sponsor believes that the Fund is subject to significant credit risk relating to the counterparty to such sugar interest. For purposes of financial statements and reports, the Sponsor will recalculate the NAV where necessary to reflect the “fair value” of a Futures Contract when the Futures Contract closes at its price fluctuation limit for the day. Short term Treasury securities held by the Fund are valued by the administrator using values received from recognized third-party vendors and dealer quotes. NAV includes any unrealized profit or loss on open sugar interests and any other income or expense accruing to the Fund but unpaid or not received by the Fund.
Sponsor Fee, Allocation of Expenses and Related Party Transactions
The Sponsor is responsible for investing the assets of the Fund in accordance with the objectives and policies of the 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 Fund is 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 Fund generally pays 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 Fund also pays its portion of 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 funds based on activity drivers deemed most appropriate by the Sponsor for such expenses, including but not limited to relative assets under management and creation 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 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 Funds, which are primarily the cost of performing accounting and financial reporting, regulatory compliance, and trading activities that are directly attributable to the Fund. Such expenses are primarily recorded as distribution and marketing fees on the statement of operations. All asset-based fees and expenses for the Funds are calculated on the prior day’s net assets.
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| Three months ended June 30, 2019 | Three months ended June 30, 2018 | Six months ended June 30, 2019 | Six months ended June 30, 2018
Recognized Related Party Transactions | $41,333 | $39,570 | $124,755 | $107,334
Waived Related Party Transactions | $21,305 | $13,061 | $30,473 | $44,211

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:

| CANE
Three months ended June 30, 2019 | $57,954
Three months ended June 30, 2018 | $66,209
Six months ended June 30, 2019 | $99,436
Six months ended June 30, 2018 | $146,899

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 Fund 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 Fund. Unobservable inputs reflect the Fund’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 Fund has the ability to access. Valuation adjustments and block discounts are not applied to Level 1 financial instruments. Since valuations are based on quoted prices that are readily and regularly available in an active market, valuation of these financial instruments 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.
71
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 Fund’s own assumptions are set to reflect those that market participants would use in pricing the asset or liability at the measurement date. The Fund 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. 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 June 30, 2019 and December 31, 2018, in the opinion of the Trust and the Fund, the reported value of the Sugar Futures Contracts traded on the ICE fairly reflected the value of the Sugar Futures Contracts held by the Fund, and no adjustments were necessary. 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 Fund considers the average volume of the specific underlying futures contracts traded on the relevant exchange for the periods being reported.
For the three and six months ended June 30, 2019 and year ended December 31, 2018, the Fund did not have any significant transfers between any of the levels of the fair value hierarchy.
The Fund records its 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.
Net Income (Loss) per Share
Net income (loss) per share is the difference between the NAV per unit at the beginning of each period and at the end of each period. The weighted average number of units outstanding was computed for purposes of disclosing net income (loss) per weighted average unit. The weighted average units are equal to the number of units outstanding at the end of the period, adjusted proportionately for units created or redeemed based on the amount of time the units were outstanding during such period.
New Accounting Pronouncements
The Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2019-04: “Codification Improvements to Topic 326, Financial Instruments – Credit Losses, Topic 815, Derivatives and hedging, and Topic 825, Financial Instruments.” The amendments clarify and improve areas of guidance related to the recently issued standards on credit losses, hedging, and recognition and measurement, specifically relating to ASU 2017-12. The amendments were adopted for the quarter ended June 30, 2019; the adoption did not have a material impact on the financial statements and disclosures of the Trust or the Fund.
The FASB issued ASU 2019-01: "Leases (Topic 842): Codification Improvements. These amendments align the guidance for fair value of underlying assets by lessors that are not manufacturers or dealers in Topic 842 with that of existing guidance. 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 but the amendment is not expected to have a material impact on the financial statements of the Trust or the Fund.
The FASB issued 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 Fund.
72
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 Fund.
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 Fund.
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 were adopted for the quarter ended June 30, 2019; the adoption did not have a material impact on the financial statements and disclosures of the Trust or the Fund.
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 were adopted for the quarter ended June 30, 2019; the adoption did not have a material impact on the financial statements and disclosures of the Trust or the Fund.
Note 4 – Fair Value Measurements
The Fund’s assets and liabilities recorded at fair value have been categorized based upon a fair value hierarchy as described in the Fund’s significant accounting policies in Note 3. The following table presents information about the Fund’s assets and liabilities measured at fair value as of June 30, 2019 and December 31, 2018:
June 30, 2019

Assets: | Level 1 | Level 2 | Level 3 | Balance as of June 30, 2019
Cash Equivalents | $3,049,560 | $- | $- | $3,049,560
Sugar Futures Contracts | 77,426 | - | - | 77,426
Total | $3,126,986 | $- | $- | $3,126,986
Liabilities: | Level 1 | Level 2 | Level 3 | Balance as of June 30, 2019
Sugar Futures Contracts | $100,196 | $- | $- | $100,196

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December 31, 2018

Assets: | Level 1 | Level 2 | Level 3 | Balance as of December 31, 2018
Cash Equivalents | $2,497,232 | $- | $- | $2,497,232
Sugar Futures Contracts | 233,979 | - | - | 233,979
Total | $2,731,211 | $- | $- | $2,731,211
Liabilities: | Level 1 | Level 2 | Level 3 | Balance as of December 31, 2018
Sugar Futures Contracts | $47,656 | $- | $- | $47,656

For the six months ended June 30, 2019 and year ended December 31, 2018, the Fund 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 Fund utilizes 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 Fund’s 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 Fund is also subject to additional counterparty risk due to inability of its counterparties to meet the terms of their contracts. For the three and six months ended June 30, 2019 and year ended December 31, 2018, the Fund invested only in commodity futures contracts.
Futures Contracts
The Fund is subject to commodity price risk in the normal course of pursuing its 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 the Fund each day, depending on the daily fluctuations in the value of the contract, and are recorded as unrealized gains or losses by the Fund. Futures contracts may reduce the Fund’s exposure to counterparty risk since futures contracts are exchange-traded; and the exchange’s clearinghouse, as the counterparty 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 the 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 FASB 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 June 30, 2019 and December 31, 2018.
74
Offsetting of Financial Assets and Derivative Assets as of June 30, 2019

| (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 | Due to Broker | Net Amount
Commodity Price |  |  |  |  |  |
Sugar futures contracts | $77,426 | $- | $77,426 | $77,426 | $- | $-

Offsetting of Financial Liabilities and Derivative Liabilities as of June 30, 2019

| (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 | Due from Broker | Net Amount
Commodity Price |  |  |  |  |  |
Sugar futures contracts | $100,196 | $- | $100,196 | $77,426 | $22,770 | $-

Offsetting of Financial Assets and Derivative Assets as of December 31, 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 | Due to Broker | Net Amount
Commodity Price |  |  |  |  |  |
Sugar futures contracts | $233,979 | $- | $233,979 | $47,656 | $- | $186,323

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Offsetting of Financial Liabilities and Derivative Liabilities as of December 31, 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 | Due from Broker | Net Amount
Commodity Price |  |  |  |  |  |
Sugar futures contracts | $47,656 | $- | $47,656 | $47,656 | $- | $-

The following tables identify the net gain and loss amounts included in the statements of operations as realized and unrealized gains and losses on trading of commodity futures contracts categorized by primary underlying risk:
Three months ended June 30, 2019

| Realized Loss on Commodity Futures Contracts | Net Change in Unrealized Depreciation on Commodity Futures Contracts
Commodity Price |  |
Sugar futures contracts | $(68,701) | $(269,125)

Three months ended June 30, 2018

| Realized Loss on Commodity Futures Contracts | Net Change in Unrealized Appreciation on Commodity Futures Contracts
Commodity Price |  |
Sugar futures contracts | $(1,028,754) | $278,275

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Six months ended June 30, 2019

| Realized Gain on Commodity Futures Contracts | Net Change in Unrealized Depreciation on Commodity Futures Contracts
Commodity Price |  |
Sugar futures contracts | $292,667 | $(209,093)

Six months ended June 30, 2018

| Realized Loss on Commodity Futures Contracts | Net Change in Unrealized Depreciation on Commodity Futures Contracts
Commodity Price |  |
Sugar futures contracts | $(1,297,867) | $(608,462)

Volume of Derivative Activities
The average notional market value categorized by primary underlying risk for all futures contracts held were $10.3 million and $$10.3 million, respectively, for the three and six months ended June 30, 2019 and $13.7 million and $10.6 million, respectively, for the three and six months ended June 30, 2018.
Note 6 – Financial Highlights
The following table presents per unit performance data and other supplemental financial data for the three and six months ended June 30, 2019 and 2018. This information has been derived from information presented in the financial statements. This information has been derived from information presented in the financial statements and is presented with total expenses gross of expenses waived by the Sponsor and with total expenses net of expenses waived by the Sponsor, as appropriate.

| Three months ended June 30, 2019 | Three months ended June 30, 2018 | Six months ended June 30, 2019 | Six months ended June 30, 2018
Per Share Operation Performance |  |  |  |
Net asset value at beginning of period | $7.30 | $8.29 | $7.07 | $9.79
Income (loss) from investment operations: |  |  |  |
Investment income | 0.05 | 0.04 | 0.09 | 0.07
Net realized and unrealized (loss) gain on commodity futures contracts | (0.18) | (0.64) | 0.07 | (2.10)
Total expenses, net | (0.07) | (0.07) | (0.13) | (0.14)
Net (decrease) increase in net asset value | (0.20) | (0.67) | 0.03 | (2.17)
Net asset value at end of period | $7.10 | $7.62 | $7.10 | $7.62
Total Return | (2.74)% | (8.08)% | 0.42% | (22.17)%
Ratios to Average Net Assets (Annualized) |  |  |  |
Total expenses | 5.97% | 5.81% | 5.56% | 6.64%
Total expenses, net | 3.69% | 3.70% | 3.63% | 3.63%
Net investment loss | (1.09)% | (1.76)% | (1.05)% | (1.81)%

The financial highlights per share data are calculated consistent with the methodology used to calculate asset-based fees and expenses.
77
Note 7 – Organizational and Offering Costs
Expenses incurred in organizing of the Trust and the initial offering of the Shares of the Fund, including applicable SEC registration fees, were borne directly by the Sponsor. The Fund will not be obligated to reimburse the Sponsor.
Note 8 – Subsequent Events
Management has evaluated the financial statements for the quarter-ended June 30, 2019 for subsequent events through the date of this filing and noted no material events requiring either recognition through the date of the filing or disclosure herein for the Fund.
78
TEUCRIUM WHEAT FUND
STATEMENTS OF ASSETS AND LIABILITIES

| June 30, 2019 | December 31, 2018
| (Unaudited) |
Assets |  |
Cash and cash equivalents | $59,853,849 | $63,300,447
Interest receivable | 334 | 7
Other assets | 31,889 | 13,454
Equity in trading accounts: |  |
Commodity futures contracts | 4,491,550 | -
Due from broker | - | 5,867,925
Total equity in trading accounts | 4,491,550 | 5,867,925
Total assets | 64,377,622 | 69,181,833
Liabilities |  |
Management fee payable to Sponsor | 49,044 | 48,550
Payable for purchases of commercial paper | - | 9,969,591
Other liabilities | 55,470 | 28,419
Equity in trading accounts: |  |
Commodity futures contracts | 1,325,775 | 3,985,400
Due to broker | 4,247,442 | -
Total equity in trading accounts | 5,573,217 | 3,985,400
Total liabilities | 5,677,731 | 14,031,960
Net assets | $58,699,891 | $55,149,873
Shares outstanding | 10,200,004 | 9,275,004
Shares outstanding | 43,375,000 | 15,175,000
Net asset value per share | $5.75 | $5.95
Market value per share | $5.73 | $5.93

The accompanying notes are an integral part of these financial statements.
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TEUCRIUM WHEAT FUND
SCHEDULE OF INVESTMENTS
June 30, 2019
(Unaudited)

Description: Assets | Fair Value | Percentage of Net Assets | Shares
Cash equivalents |  |  |
Money market funds |  |  |
Fidelity Institutional Money Market Funds - Government Portfolio (cost $118) | $118 | 0.00% | 118
|  |  | Principal Amount
U.S. Treasury Obligations |  |  |
U.S. Treasury Bills 2.02% (cost: $2,711,046 7/30/2019) (a)(b) | $2,711,646 | 4.62% | 2,716,000
Commercial Paper |  |  |
Boston Scientific Corporation 2.77% (cost: $2,483,636 due 8/09/2019) | $2,492,579 | 4.25% | 2,500,000
Boston Scientific Corporation 2.75% (cost: $2,484,700 due 8/12/2019) | 2,492,067 | 4.24 | 2,500,000
Broadcom Inc. 2.67% (cost: $4,990,062 due 7/16/2019) | 4,994,479 | 8.51 | 5,000,000
Enable Midstream Partners, LP 2.93% (cost: $2,488,521 due 7/24/2019) | 2,495,368 | 4.25 | 2,500,000
Enable Midstream Partners, LP 2.91% (cost: $2,488,800 due 8/05/2019) | 2,493,000 | 4.25 | 2,500,000
Enable Midstream Partners, LP 2.83% (cost: $4,965,000 due 9/18/2019) | 4,969,278 | 8.47 | 5,000,000
Energy Transfer Operating, L.P. 2.72% (cost: $4,995,500 due 7/10/2019) | 4,996,625 | 8.51 | 5,000,000
General Motors Financial Company, Inc. 2.68% (cost: $2,490,949 due 7/25/2019) | 2,495,567 | 4.25 | 2,500,000
General Motors Financial Company, Inc. 2.68% (cost: $2,485,094 due 9/03/2019) | 2,488,222 | 4.24 | 2,500,000
Total Commercial Paper (cost: $29,872,262) | $29,917,185 | 50.97% |
Total cash equivalents | $32,628,949 | 55.59% |
|  |  | Notional Amount
|  |  | (Long Exposure)
Commodity futures contracts |  |  |
United States wheat futures contracts |  |  |
CBOT wheat futures SEP19 (776 contracts) | $2,599,787 | 4.43% | $20,457,300
CBOT wheat futures DEC20 (733 contracts) | 1,891,763 | 3.22 | 20,652,275
Total commodity futures contracts | $4,491,550 | 7.65% | $41,109,575
|  | Percentage of | Notional Amount
Description: Liabilities | Fair Value | Net Assets | (Long Exposure)
Commodity futures contracts |  |  |
United States wheat futures contracts |  |  |
CBOT wheat futures DEC19 (653 contracts) | $1,325,775 | 2.26% | 17,582,025

(a) Discount yield at the time of purchase.
(b) All of the security is held by the broker as collateral for open futures contracts.
The accompanying notes are an integral part of these financial statements.
80
TEUCRIUM WHEAT FUND
SCHEDULE OF INVESTMENTS
December 31, 2018

|  | Percentage of |
Description: Assets | Fair Value | Net Assets | Shares
Cash equivalents |  |  |
Money market funds |  |  |
Fidelity Institutional Money Market Funds - Government Portfolio (cost $100) | $100 | 0.00% | 100
|  |  | Principal Amount
Commercial Paper |  |  |
CNH Industrial Capital LLC 2.62% (cost: $2,484,833 due 1/10/2019) | $2,498,375 | 4.53% | 2,500,000
Enable Midstream Partners, LP 2.75% (cost: $2,491,469 due 1/10/2019) | 2,498,294 | 4.53 | 2,500,000
Enable Midstream Partners, LP 3.04% (cost: $4,962,425 due 2/28/2019) | 4,975,785 | 9.02 | 5,000,000
Energy Transfer Operating, L.P. 3.10% (cost: $7,481,452 due 1/31/2019) | 7,481,452 | 13.57 | 7,500,000
Ford Motor Credit Company LLC 2.63% (cost: $2,483,750 due 1/3/2019) | 2,499,639 | 4.53 | 2,500,000
Ford Motor Credit Company LLC 2.68% (cost: $2,483,806 due 1/18/2019) | 2,496,872 | 4.53 | 2,500,000
Ford Motor Credit Company LLC 2.81% (cost: $2,483,783 due 2/6/2019) | 2,493,050 | 4.52 | 2,500,000
General Motors Financial Company, Inc. 2.83% (cost: $2,488,139 due 3/5/2019) | 2,488,139 | 4.51 | 2,500,000
Humana Inc. 2.91% (cost: $2,484,600 due 2/11/2019) | 2,491,800 | 4.52 | 2,500,000
Royal Caribbean Cruises Ltd. 2.73% (cost: $4,988,709 due 1/2/2019) | 4,999,618 | 9.07 | 5,000,000
Royal Caribbean Cruises Ltd. 2.77% (cost: $2,494,462 due 1/2/2019) | 2,499,809 | 4.53 | 2,500,000
Total Commercial Paper (cost: $37,327,428) | $37,422,833 | 67.86% |
Total Cash Equivalents | $37,422,933 | 67.86% |
|  |  | Notional Amount
Description: Liabilities | Fair Value | Percentage of Net Assets | (Long Exposure)
Commodity futures contracts |  |  |
United States wheat futures contracts |  |  |
CBOT wheat futures MAY19 (756 contracts) | $1,367,838 | 2.48% | $19,296,900
CBOT wheat futures JUL19 (637 contracts) | 544,812 | 0.99 | 16,514,225
CBOT wheat futures DEC19 (713 contracts) | 2,072,750 | 3.76 | 19,340,125
Total commodity futures contracts | $3,985,400 | 7.23% | $55,151,250

The accompanying notes are an integral part of these financial statements.
81
TEUCRIUM WHEAT FUND
STATEMENTS OF OPERATIONS
(Unaudited)

| Three months ended | Three months ended | Six months ended | Six months ended
| June 30, 2019 | June 30, 2018 | June 30, 2019 | June 30, 2018
Income |  |  |  |
Realized and unrealized gain (loss) on trading of commodity futures contracts: |  |  |  |
Realized (loss) gain on commodity futures contracts | $(4,271,888) | $3,567,188 | $(8,367,250) | $4,899,850
Net change in unrealized appreciation or (depreciation) on commodity futures contracts | 9,268,062 | (1,350,213) | 7,151,175 | (262,050)
Interest income | 376,592 | 343,981 | 749,059 | 619,384
Total income (loss) | 5,372,766 | 2,560,956 | (467,016) | 5,257,184
Expenses |  |  |  |
Management fees | 141,265 | 170,118 | 278,910 | 335,155
Professional fees | 113,106 | 154,947 | 206,784 | 270,305
Distribution and marketing fees | 225,302 | 315,498 | 422,208 | 594,894
Custodian fees and expenses | 27,751 | 49,845 | 52,527 | 84,440
Business permits and licenses fees | 9,025 | 9,038 | 14,531 | 18,608
General and administrative expenses | 20,688 | 39,400 | 44,087 | 61,502
Brokerage commissions | 4,238 | 18,113 | 14,841 | 35,143
Other expenses | 2,825 | 15,607 | 5,578 | 28,647
Total expenses | 544,200 | 772,566 | 1,039,466 | 1,428,694
Expenses waived by the Sponsor | - | (121,015) | (2,500) | (144,784)
Total expenses, net | 544,200 | 651,551 | 1,036,966 | 1,283,910
Net income (loss) | $4,828,566 | $1,909,405 | $(1,503,982) | $3,973,274
Net income (loss) per share | $0.45 | $0.18 | $(0.20) | $0.38
Net income (loss) per weighted average share | $0.46 | $0.18 | $(0.15) | $0.38
Weighted average shares outstanding | 10,503,575 | 10,321,707 | 10,130,253 | 10,458,153

The accompanying notes are an integral part of these financial statements.
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TEUCRIUM WHEAT FUND
STATEMENTS OF CHANGES IN NET ASSETS
(Unaudited)

| Six months ended | Six months ended
| June 30, 2019 | June 30, 2018
Operations |  |
Net (loss) income | $(1,503,982) | $3,973,274
Capital transactions |  |
Issuance of Shares | 9,939,010 | 11,511,955
Redemption of Shares | (4,885,010) | (10,334,778)
Total capital transactions | 5,054,000 | 1,177,177
Net change in net assets | 3,550,018 | 5,150,451
Net assets, beginning of period | $55,149,873 | $61,416,019
Net assets, end of period | $58,699,891 | $66,566,470
Net asset value per share at beginning of period | $5.95 | $5.99
Net asset value per share at end of period | $5.75 | $6.37
Creation of Shares | 1,800,000 | 1,775,000
Redemption of Shares | 875,000 | 1,575,000

The accompanying notes are an integral part of these financial statements.
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TEUCRIUM WHEAT FUND
STATEMENTS OF CASH FLOWS
(Unaudited)

| Six months ended | Six months ended
| June 30, 2019 | June 30, 2018
Cash flows from operating activities: |  |
Net (loss) income | $(1,503,982) | $3,973,274
Adjustments to reconcile net (loss) income to net cash (used in) provided by operating activities: |  |
Net change in unrealized appreciation or (depreciation) on commodity futures contracts | (7,151,175) | 262,050
Changes in operating assets and liabilities: |  |
Due from broker | 5,867,925 | (3,339,379)
Interest receivable | (327) | 111
Other assets | (18,435) | (70,728)
Due to broker | 4,247,442 | -
Payable for purchases of commercial paper | (9,969,591) | -
Management fee payable to Sponsor | 494 | 5,174
Other liabilities | 27,051 | 38,930
Net cash (used in) provided by operating activities | (8,500,598) | 869,432
Cash flows from financing activities: |  |
Proceeds from sale of Shares | 9,939,010 | 11,511,955
Redemption of Shares | (4,885,010) | (10,334,778)
Net cash provided by financing activities | 5,054,000 | 1,177,177
Net change in cash and cash equivalents | (3,446,598) | 2,046,609
Cash and cash equivalents, beginning of period | 63,300,447 | 58,932,231
Cash and cash equivalents, end of period | $59,853,849 | $60,978,840

The accompanying notes are an integral part of these financial statements.
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NOTES TO FINANCIAL STATEMENTS
June 30, 2019
(Unaudited)
Note 1 – Organization and Operation
Teucrium Wheat Fund (referred to herein as “WEAT” or the “Fund”) is a commodity pool that is a series of Teucrium Commodity Trust (“Trust”), a Delaware statutory trust formed on September 11, 2009. The Fund issues common units, called the “Shares,” representing fractional undivided beneficial interests in the Fund. The Fund continuously offers Creation Baskets consisting of 25,000 Shares at their Net Asset Value (“NAV”) to “Authorized Purchasers” through Foreside Fund Services, LLC, which is the distributor for the Fund (the “Distributor”). Authorized Purchasers sell such Shares, which are listed on the New York Stock Exchange (“NYSE”) Arca under the symbol “WEAT,” to the public at per-Share offering prices that reflect, among other factors, the trading price of the Shares on the NYSE Arca, the NAV of the Fund at the time the Authorized Purchaser purchased the Creation Baskets and the NAV at the time of the offer of the Shares to the public, the supply of and demand for Shares at the time of sale, and the liquidity of the markets for wheat interests. The Fund’s Shares trade in the secondary market on the NYSE Arca at prices that are lower or higher than their NAV per Share.
The investment objective of WEAT is to have the daily changes in percentage terms of the Shares’ Net Asset Value (“NAV”) reflect the daily changes in percentage terms of a weighted average of the closing settlement prices for three futures contracts for wheat (“Wheat Futures Contracts”) that are traded on the Chicago Board of Trade (“CBOT”):
WEAT Benchmark

CBOT Wheat Futures Contract | Weighting
Second to expire | 35%
Third to expire | 30%
December following the third-to-expire | 35%

The Fund commenced investment operations on September 19, 2011 and has a fiscal year ending December 31. The Fund’s sponsor is Teucrium Trading, LLC (the “Sponsor”). The Sponsor is responsible for the management of the Fund. The Sponsor is a member of the National Futures Association (the “NFA”) and became a commodity pool operator 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.
On June 17, 2011, the Fund’s initial registration of 10,000,000 shares on Form S1 was declared effective by the SEC. On September 19, 2011, the Fund listed its shares on the NYSE Arca under the ticker symbol “WEAT.” On the business day prior to that, the Fund issued 100,000 shares in exchange for $2,500,000 at the Fund’s initial NAV of $25 per share. The Fund also commenced investment operations on September 19, 2011 by purchasing commodity futures contracts traded on the CBOT. On December 31, 2010, the Fund had four shares outstanding, which were owned by the Sponsor. The current registration statement for WEAT was declared effective on April 29, 2019. This registration statement for WEAT registered an additional 30,000,000 shares.
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 Fund’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 well as the most recent Form S-1 filing, as applicable. The operating results for the three and six months ended June 30, 2019 are not necessarily indicative of the results to be expected for the full year ending December 31, 2019.
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.
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Note 2 – Principal Contracts and Agreements
The Sponsor employs U.S. Bank N.A. 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 doing business as U.S. Bank Global Fund Services ("Fund Services") is 615 E. Michigan Street, Milwaukee, WI 53202. In addition, effective on the Conversion Date, Fund Services, 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 Fund Services 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 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 statements of operations. A summary of these expenses is included below. Pursuant to a Consulting Services Agreement, Foreside Consulting Services, LLC, performs certain consulting support services for the Trust's Sponsor. Additionally, Foreside Distributors, LLC performs certain distribution consulting services pursuant to a Distribution Consulting Agreement with the Trust's Sponsor.
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 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 statements of operations. A summary of these expenses is included below.
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The Sponsor employs Exchange Traded Concepts, LLC ("ETC") as the Marketing Agent, providing certain marketing consulting services in connection with the content strategy and e-mail marketing for the Funds. For its services as the Marketing Agent, ETC receives $5,000 a month and 0.02% of the Fund's average daily net assets, when assets are above the combined amount of $160 million. These services are recorded in distribution and marketing fees on the statements of the operations. A summary of these expenses is included below:

| Three months ended June 30, 2019 | Three months ended June 30, 2018 | Six months ended June 30, 2019 | Six months ended June 30, 2018
Amount Recognized for Custody Services | $27,751 | $49,845 | $52,527 | $84,440
Amount of Custody Services Waived | $- | $21,567 | $- | $21,567
Amount Recognized for Distribution Services | $10,533 | $14,900 | $21,898 | $35,118
Amount of Distribution Services Waived | $- | $4,950 | $- | $9,354
Amount Recognized for Brokerage Commissions | $4,238 | $18,113 | $14,841 | $35,143
Amount of Brokerage Commissions Waived | $- | $- | $- | $-
Amount Recognized for Wilmington Trust | $- | $- | $- | $-
Amount of Wilmington Trust Waived | $- | $- | $- | $-
Amount Recognized for Marketing Agent | $4,116 | $- | $4,116 | $-
Amount of Marketing Agent Waived | $- | $- | $- | $-

Note 3 – Summary of Significant Accounting Policies
Basis of Presentation
The accompanying financial statements have been prepared in accordance 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.
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 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 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 financial statements and reflected in cash and cash equivalents on the statements of assets and liabilities and in cash, cash equivalents and restricted cash on the 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 statements of operations.
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Beginning in February of 2019, the Sponsor began investing a portion of the cash held by the broker in short term Treasury Bills as collateral for open futures contracts. 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.
The Sponsor adopted ASC 606, Revenue from Contracts With Customers, for the year ended December 31, 2018. The adoption did not have a material impact on the financial statements of the Trust or the Funds.
Brokerage Commissions
Brokerage commissions on all open commodity futures contracts are accrued on the trade date and on a full-turn basis.
Income Taxes
For federal income tax purposes, the Fund will be treated as a publicly traded partnership. A publicly traded partnership is generally treated as a corporation for federal income tax purposes unless 90% or more of the publicly traded partnership’s gross income for each taxable year of its existence consists of qualifying income as defined in section 7704(d) of the Internal Revenue Code of 1986, as amended. Qualifying income is defined as generally including, in pertinent part, interest (other than from a financial business), dividends, and gains from the sale or disposition of capital assets held for the production of interest or dividends. In the case of a partnership of which a principal activity is the buying and selling of commodities, other than as inventory, or of futures, forwards and options with respect to commodities, qualifying income also includes income and gains from commodities and from futures, forwards, options with respect to commodities and, provided the partnership is a trader or investor with respect to such assets, swaps and other notional principal contracts with respect to commodities. The Fund expects that at least 90% of the Fund’s gross income for each taxable year will consist of qualifying income and that the Fund will be taxed as a partnership for federal income tax purposes. The Fund does not record a provision for income taxes because the shareholders report their share of the Fund’s income or loss on their income tax returns. The financial statements reflect the Fund’s transactions without adjustment, if any, required for income tax purposes.
The Fund is 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 Fund files an income tax return in the U.S. federal jurisdiction, and may file income tax returns in various U.S. states and foreign jurisdictions. For all tax years 2016 to 2018, the Fund remains 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 Fund recording a tax liability that reduces net assets. Based on its analysis, the Fund has determined that it has not incurred any liability for unrecognized tax benefits as of June 30, 2019 and for the years ended December 31, 2018, 2017 and 2016. However, the Fund’s 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 Fund recognizes 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 six months ended June 30, 2019 and 2018.
The Fund 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 Fund’s management does not expect that the total amount of unrecognized tax benefits will materially change over the next twelve months.
Creations and Redemptions
Authorized Purchasers may purchase Creation Baskets consisting of 25,000 shares from the 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 the Fund only in blocks of 25,000 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.
The 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 Fund’s statements of assets and liabilities as receivable for shares sold. Amounts payable to Authorized Purchasers upon redemption are reflected in the Fund’s statements of assets and liabilities as payable for shares redeemed.
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As outlined in the most recent Form S-1 filing, 50,000 shares represents two Redemption Baskets for the Fund and a minimum level of shares. If the 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.
Allocation of Shareholder Income and Losses
Profit or loss is allocated among the shareholders of the Fund in proportion to the number of shares each shareholder holds as of the close of each month.
Cash and Cash Equivalents

| June 30, 2019 | December 31, 2018
Money Market Funds | $118 | $100
Demand Deposit Savings Accounts | 27,224,900 | 25,877,514
Commercial Paper | 29,917,185 | 37,422,833
Treasury Bills | 2,711,646 | -
Total cash and cash equivalents as presented on the Statement of Assets and Liabilities | $59,853,849 | $63,300,447

Due from/to Broker
The amount recorded by the Fund 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 Fund’s 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 counterparties, so the counterparties 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 Fund’s trading, the Fund (and not its shareholders personally) is 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.
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Calculation of Net Asset Value
The Fund’s NAV is calculated by:

| ● | Taking the current market value of its total assets and

| ● | Subtracting any liabilities.

The administrator, Fund Services, calculates the NAV of the Fund once each trading day. It calculates the NAV as of the earlier of the close of the NYSE or 4:00 p.m. New York time. The NAV for a particular trading day is released after 4:15 p.m. New York time.
In determining the value of Wheat Futures Contracts, the administrator uses the CBOT closing price. The administrator determines the value of all other Fund investments as of the earlier of the close of the NYSE or 4:00 p.m. New York time. The value of over-the-counter wheat interests is determined based on the value of the commodity or futures contract underlying such wheat interest, except that a fair value may be determined if the Sponsor believes that the Fund is subject to significant credit risk relating to the counterparty to such wheat interest. For purposes of financial statements and reports, the Sponsor will recalculate the NAV where necessary to reflect the “fair value” of a Futures Contract when the Futures Contract closes at its price fluctuation limit for the day. Short term Treasury securities held by the Fund are valued by the administrator using values received from recognized third-party vendors and dealer quotes. NAV includes any unrealized profit or loss on open wheat interests and any other income or expense accruing to the Fund but unpaid or not received by the Fund.
Sponsor Fee, Allocation of Expenses and Related Party Transactions
The Sponsor is responsible for investing the assets of the Fund in accordance with the objectives and policies of the 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 Fund is 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 Fund generally pays 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 Fund also pays its portion of 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 funds based on activity drivers deemed most appropriate by the Sponsor for such expenses, including but not limited to relative assets under management and creation 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 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 Funds, which are primarily the cost of performing accounting and financial reporting, regulatory compliance, and trading activities that are directly attributable to the Fund. Such expenses are primarily recorded as distribution and marketing fees on the statement of operations. All asset-based fees and expenses for the Funds are calculated on the prior day’s net assets.

| Three months ended June 30, 2019 | Three months ended June 30, 2018 | Six months ended June 30, 2019 | Six months ended June 30, 2018
Recognized Related Party Transactions | $124,282 | $180,199 | $332,810 | $586,809
Waived Related Party Transactions | $- | $27,984 | $2,500 | $41,131

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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:

| WEAT
Three months ended June 30, 2019 | $-
Three months ended June 30, 2018 | $121,015
Six months ended June 30, 2019 | $2,500
Six months ended June 30, 2018 | $144,784

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 Fund 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 Fund. Unobservable inputs reflect the Fund’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 Fund has the ability to access. Valuation adjustments and block discounts are not applied to Level 1 financial instruments. Since valuations are based on quoted prices that are readily and regularly available in an active market, valuation of these financial instruments 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 Fund’s own assumptions are set to reflect those that market participants would use in pricing the asset or liability at the measurement date. The Fund 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. 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.
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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 Fund considers the average volume of the specific underlying futures contracts traded on the relevant exchange for the three months being reported.
On June 30, 2019 and December 31, 2018, in the opinion of the Trust and the Fund, the reported value of the Wheat Futures Contracts traded on the CBOT fairly reflected the value of the Wheat Futures Contracts held by the Fund, and no adjustments were necessary. 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 Fund considers the average volume of the specific underlying futures contracts traded on the relevant exchange for the periods being reported.
For the three and six months ended June 30, 2019 and year ended December 31, 2018, the Fund did not have any significant transfers between any of the levels of the fair value hierarchy.
The Fund records its 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.
Expenses
Expenses are recorded using the accrual method of accounting.
Net Income (Loss) per Share
Net income (loss) per share is the difference between the NAV per unit at the beginning of each period and at the end of each period. The weighted average number of units outstanding was computed for purposes of disclosing net income (loss) per weighted average unit. The weighted average units are equal to the number of units outstanding at the end of the period, adjusted proportionately for units created or redeemed based on the amount of time the units were outstanding during such period.
New Accounting Pronouncements
The Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2019-04: “Codification Improvements to Topic 326, Financial Instruments – Credit Losses, Topic 815, Derivatives and hedging, and Topic 825, Financial Instruments.” The amendments clarify and improve areas of guidance related to the recently issued standards on credit losses, hedging, and recognition and measurement, specifically relating to ASU 2017-12. The amendments were adopted for the quarter ended June 30, 2019; the adoption did not have a material impact on the financial statements and disclosures of the Trust or the Fund.
The FASB issued ASU 2019-01: "Leases (Topic 842): Codification Improvements. These amendments align the guidance for fair value of underlying assets by lessors that are not manufacturers or dealers in Topic 842 with that of existing guidance. 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 but the amendment is not expected to have a material impact on the financial statements of the Trust or the Fund.
The FASB issued 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 Fund.
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 Fund.
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 Fund.
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 were adopted for the quarter ended June 30, 2019; the adoption did not have a material impact on the financial statements and disclosures of the Trust or the Fund.
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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 were adopted for the quarter ended March 31, 2019; the adoption did not have a material impact on the financial statements and disclosures of the Trust or the Fund.
Note 4 – Fair Value Measurements
The Fund’s assets and liabilities recorded at fair value have been categorized based upon a fair value hierarchy as described in the Fund’s significant accounting policies in Note 3. The following table presents information about the Fund’s assets and liabilities measured at fair value as of June 30, 2019 and December 31, 2018:
June 30, 2019

Assets: | Level 1 | Level 2 | Level 3 | Balance as of June 30, 2019
Cash equivalents | $32,628,949 | $- | $- | $32,628,949
Wheat futures contracts | 4,491,550 | - | - | 4,491,550
Total | $37,120,499 | $- | $- | $37,120,499
Liabilities: | Level 1 | Level 2 | Level 3 | Balance as of June 30, 2019
Wheat futures contracts | $1,325,775 | $- | $- | $1,325,775

December 31, 2018

Assets: | Level 1 | Level 2 | Level 3 | Balance as of December 31, 2018
Cash equivalents | $37,422,933 | $- | $- | $37,422,933
Liabilities: | Level 1 | Level 2 | Level 3 | Balance as of December 31, 2018
Wheat futures contracts | $3,985,400 | $- | $- | $3,985,400

For the six months ended June 30, 2019 and year ended December 31, 2018, the Fund 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 Fund utilizes 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 Fund’s 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 Fund is also subject to additional counterparty risk due to inability of its counterparties to meet the terms of their contracts. For the three and six months ended June 30, 2019 and for the year ended December 31, 2018, the Fund invested only in commodity futures contracts.
Futures Contracts
The Fund is subject to commodity price risk in the normal course of pursuing its 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 Futures Commission Merchant (“FCM”). Subsequent payments (variation margin) are made or received by the Fund each day, depending on the daily fluctuations in the value of the contract, and are recorded as unrealized gains or losses by the Fund. Futures contracts may reduce the Fund’s exposure to counterparty risk since futures contracts are exchange-traded; and the exchange’s clearinghouse, as the counterparty 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 the 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 June 30, 2019 and December 31, 2018.
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Offsetting of Financial Assets and Derivative Assets as of June 30, 2019

| (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 | Due to Broker | Net Amount
Commodity Price |  |  |  |  |  |
Wheat futures contracts | $4,491,550 | $- | $4,491,550 | $1,325,775 | $3,165,775 | $-

Offsetting of Financial Liabilities and Derivative Liabilities as of June 30, 2019

| (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 | Due from Broker | Net Amount
Commodity Price |  |  |  |  |  |
Wheat futures contracts | $1,325,775 | $- | $1,325,775 | $1,325,775 | $- | $-

Offsetting of Financial Liabilities and Derivative Liabilities as of December 31, 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 | Due from Broker | Net Amount
Commodity Price |  |  |  |  |  |
Wheat futures contracts | $3,985,400 | $- | $3,985,400 | $- | $3,985,400 | $-

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The following tables identify the net gain and loss amounts included in the statements of operations as realized and unrealized gains and losses on trading of commodity futures contracts categorized by primary underlying risk:
Three months ended June 30, 2019

| Realized Loss on Commodity Futures Contracts | Net Change in Unrealized Appreciation on Commodity Futures Contracts
Commodity Price |  |
Wheat futures contracts | $(4,271,888) | $9,268,062

Three months ended June 30, 2018

| Realized Gain on Commodity Futures Contracts | Net Change in Unrealized Depreciation on Commodity Futures Contracts
Commodity Price |  |
Wheat futures contracts | $3,567,188 | $(1,350,213)

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Six months ended June 30, 2019

| Realized Loss on Commodity Futures Contracts | Net Change in Unrealized Appreciation on Commodity Futures Contracts
Commodity Price |  |
Wheat futures contracts | $(8,367,250) | $7,151,175

Six months ended June 30, 2018

| Realized Gain on Commodity Futures Contracts | Net Change in Unrealized Depreciation on Commodity Futures Contracts
Commodity Price |  |
Wheat futures contracts | $4,899,850 | $(262,050)

Volume of Derivative Activities
The average notional market value categorized by primary underlying risk for all futures contracts held was $56.5 million and $56.0 million, respectively, for the three and six months ended June 30, 2019 and $69.7 million and $68.9 million, respectively, for the three and six months ended June 30, 2018.
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Note 6 – Financial Highlights
The following tables present per unit performance data and other supplemental financial data for the three and six months ended June 30, 2019 and 2018. This information has been derived from information presented in the financial statements. This information has been derived from information presented in the financial statements and is presented with total expenses gross of expenses waived by the Sponsor and with total expenses net of expenses waived by the Sponsor, as appropriate.

| Three months ended June 30, 2019 | Three months ended June 30, 2018 | Six months ended June 30, 2019 | Six months ended June 30, 2018
Per Share Operation Performance |  |  |  |
Net asset value at beginning of period | $5.30 | $6.19 | $5.95 | $5.99
Income (loss) from investment operations: |  |  |  |
Investment income | 0.03 | 0.03 | 0.07 | 0.06
Net realized and unrealized gain (loss) on commodity futures contracts | 0.47 | 0.21 | (0.17) | 0.44
Total expenses, net | (0.05) | (0.06) | (0.10) | (0.12)
Net increase (decrease) in net asset value | 0.45 | 0.18 | (0.20) | 0.38
Net asset value at end of period | $5.75 | $6.37 | $5.75 | $6.37
Total Return | 8.49% | 2.91% | (3.36)% | 6.34%
Ratios to Average Net Assets (Annualized) |  |  |  |
Total expenses | 3.85% | 4.54% | 3.73% | 4.26%
Total expenses, net | 3.85% | 3.83% | 3.72% | 3.83%
Net investment loss | (1.18)% | (1.81)% | (1.03)% | (1.98)%

The financial highlights per share data are calculated consistent with the methodology used to calculate asset-based fees and expenses.
Note 7 – Organizational and Offering Costs
Expenses incurred in organizing of the Trust and the initial offering of the Shares of the Fund, including applicable SEC registration fees, were borne directly by the Sponsor. The Fund will not be obligated to reimburse the Sponsor.
Note 8 – Subsequent Events
Management has evaluated the financial statements for the quarter-ended June 30, 2019 for subsequent events through the date of this filing and noted no material events requiring either recognition through the date of the filing or disclosure herein for the Fund.
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TEUCRIUM AGRICULTURAL FUND
STATEMENTS OF ASSETS AND LIABILITIES

| June 30, 2019 | December 31, 2018
| (Unaudited) |
Assets |  |
Cash equivalents | $2,740 | $2,862
Interest receivable | 5 | 5
Equity in trading accounts: |  |
Investments in securities, at fair value (cost $1,954,184 and $2,021,172 as of June 30, 2019 and December 31, 2018, respectively) | 1,508,928 | 1,523,286
Total assets | 1,511,673 | 1,526,153
Liabilities |  |
Other liabilities | 1,311 | 1,393
Net assets | $1,510,362 | $1,524,760
Shares outstanding | 75,002 | 75,002
Shares authorized | 4,625,000 | 4,625,000
Net asset value per share | $20.14 | $20.33
Market value per share | $20.13 | $20.53

The accompanying notes are an integral part of these financial statements.
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TEUCRIUM AGRICULTURAL FUND
SCHEDULE OF INVESTMENTS
June 30, 2019
(Unaudited)

Description: Assets | Fair Value | Percentage of Net Assets | Shares
Exchange-traded funds |  |  |
Teucrium Corn Fund | $371,682 | 24.62% | 22,658
Teucrium Soybean Fund | 380,232 | 25.17 | 24,181
Teucrium Sugar Fund | 376,978 | 24.96 | 53,124
Teucrium Wheat Fund | 380,036 | 25.16 | 66,037
Total exchange-traded funds (cost $1,954,184) | $1,508,928 | 99.91% |
Cash equivalents |  |  |
Money market funds |  |  |
Fidelity Institutional Money Market Funds - Government Portfolio (cost $2,740) | $2,740 | 0.18% | 2,740

The accompanying notes are an integral part of these financial statements.
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TEUCRIUM AGRICULTURAL FUND
SCHEDULE OF INVESTMENTS
December 31, 2018

Description: Assets | Fair Value | Percentage of Net Assets | Shares
Exchange-traded funds |  |  |
Teucrium Corn Fund | $383,506 | 25.15% | 23,808
Teucrium Soybean Fund | 381,970 | 25.05 | 23,581
Teucrium Sugar Fund | 374,067 | 24.53 | 52,924
Teucrium Wheat Fund | 383,743 | 25.17 | 64,537
Total exchange-traded funds (cost: $2,021,172) | $1,523,286 | 99.90% |
Cash equivalents |  |  |
Money market funds |  |  |
Fidelity Institutional Money Market Funds - Government Portfolio (cost $2,862) | $2,862 | 0.19% | 2,862

The accompanying notes are an integral part of these financial statements.
TEUCRIUM AGRICULTURAL FUND
STATEMENTS OF OPERATIONS
(Unaudited)

| Three months ended | Three months ended | Six months ended | Six months ended
| June 30, 2019 | June 30, 2018 | June 30, 2019 | June 30, 2018
Income |  |  |  |
Realized and unrealized gain (loss) on trading of securities: |  |  |  |
Realized loss on securities | $(58,112) | $(90,974) | $(65,649) | $(173,192)
Net change in unrealized appreciation or (depreciation) on securities | 105,666 | (42,469) | 52,630 | 43,186
Interest income | 16 | 12 | 34 | 19
Total income (loss) | 47,570 | (133,431) | (12,985) | (129,987)
Expenses |  |  |  |
Professional fees | 2,436 | 5,689 | 5,439 | 6,772
Distribution and marketing fees | 4,110 | 4,653 | 10,199 | 8,882
Custodian fees and expenses | 544 | 661 | 1,332 | 1,220
Business permits and licenses fees | 7 | 56 | 12,007 | 12,056
General and administrative expenses | 770 | 855 | 1,156 | 1,398
Other expenses | 9 | 182 | 45 | 397
Total expenses | 7,876 | 12,096 | 30,178 | 30,725
Expenses waived by the Sponsor | (7,181) | (10,086) | (28,765) | (27,301)
Total expenses, net | 695 | 2,010 | 1,413 | 3,424
Net income (loss) | $46,875 | $(135,441) | $(14,398) | $(133,411)
Net income (loss) per share | $0.63 | $(1.68) | $(0.19) | $(1.64)
Net income (loss) per weighted average share | $0.62 | $(1.87) | $(0.19) | $(2.18)
Weighted average shares outstanding | 75,002 | 72,255 | 75,002 | 61,190

The accompanying notes are an integral part of these financial statements.
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TEUCRIUM AGRICULTURAL FUND
STATEMENTS OF CHANGES IN NET ASSETS
(Unaudited)

| Six months ended | Six months ended
| June 30, 2019 | June 30, 2018
Operations |  |
Net loss | $(14,398) | $(133,411)
Capital transactions |  |
Issuance of Shares | - | 579,107
Net change in net assets | (14,398) | 445,696
Net assets, beginning of period | $1,524,760 | $1,137,639
Net assets, end of period | $1,510,362 | $1,583,335
Net asset value per share at beginning of period | $20.33 | $22.75
Net asset value per share at end of period | $20.14 | $21.11
Creation of Shares | - | 25,000
Redemption of Shares | - | -

The accompanying notes are an integral part of these financial statements.
101
TEUCRIUM AGRICULTURAL FUND
STATEMENTS OF CASH FLOWS
(Unaudited)

| Six months ended | Six months ended
| June 30, 2019 | June 30, 2018
Cash flows from operating activities: |  |
Net loss | $(14,398) | $(133,411)
Adjustments to reconcile net loss to net cash used in operating activities: |  |
Net change in unrealized appreciation or (depreciation) on securities | (52,630) | (43,186)
Changes in operating assets and liabilities: |  |
Net sale of investments in securities | 66,988 | (401,703)
Interest receivable | - | (3)
Other assets | - | (414)
Other liabilities | (82) | 378
Net cash used in operating activities | (122) | (578,339)
Cash flows from financing activities: |  |
Proceeds from sale of Shares | - | 579,107
Net cash provided by financing activities | - | 579,107
Net change in cash and cash equivalents | (122) | 768
Cash and cash equivalents, beginning of period | 2,862 | 2,474
Cash and cash equivalents, end of period | $2,740 | $3,242

The accompanying notes are an integral part of these financial statements.
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NOTES TO FINANCIAL STATEMENTS
June 30, 2019
(Unaudited)
Note 1 – Organization and Operation
Teucrium Agricultural Fund (referred to herein as “TAGS” or the “Fund”) is a series of Teucrium Commodity Trust (“Trust”), a Delaware statutory trust organized on September 11, 2009. The Fund operates pursuant to the Trust’s Fifth Amended and Restated Declaration of Trust and Trust Agreement (the “Trust Agreement”). The Fund was formed on March 29, 2011 and is managed and controlled by Teucrium Trading, LLC (the “Sponsor”). The Sponsor is a limited liability company formed in Delaware on July 28, 2009 that is registered as a commodity pool operator (“CPO”) with the Commodity Futures Trading Commission (“CFTC”) and is a member of the National Futures Association (“NFA”). The Sponsor registered as a Commodity Trading Advisor ("CTA") with the CFTC effective September 8, 2017.
On April 22, 2011, a registration statement was filed with the Securities and Exchange Commission (“SEC”). On February 10, 2012, the Fund’s initial registration of 5,000,000 shares on Form S-1 was declared effective by the SEC. On March 28, 2012, the Fund listed its shares on the NYSE Arca under the ticker symbol “TAGS.” On the business day prior to that, the Fund issued 300,000 shares in exchange for $15,000,000 at the Fund’s initial NAV of $50 per share. The Fund also commenced investment operations on March 28, 2012 by purchasing shares of the Underlying Funds. On December 31, 2011, the Fund had two shares outstanding, which were owned by the Sponsor. On April 30, 2018, a subsequent registration statement for TAGS was declared effective by the SEC.
The investment objective of the TAGS is to have the daily changes in percentage terms of the NAV of its 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: the Teucrium Corn Fund, the Teucrium Wheat Fund, the Teucrium Soybean Fund and the Teucrium Sugar Fund (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, generally on a daily basis, to maintain the approximate 25% allocation to each Underlying Fund:
TAGS Benchmark

Underlying Fund | Weighting
CORN | 25%
SOYB | 25%
CANE | 25%
WEAT | 25%

The investment objective of each Underlying Fund is to have the daily changes in percentage terms of its shares’ 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 in the Underlying Fund’s name. (This weighted average is referred to herein as the Underlying Fund’s “Benchmark,” the Futures Contracts that at any given time make up an Underlying Fund’s Benchmark are referred to herein as the Underlying Fund’s “Benchmark Component Futures Contracts,” and the commodity specified in the Underlying Fund’s name is referred to herein as its “Specified Commodity.”) Specifically, the Teucrium Corn Fund’s Benchmark is: (1) the second-to-expire Futures Contract for corn traded on the Chicago Board of Trade (“CBOT”), weighted 35%, (2) the third to expire CBOT corn Futures Contract, weighted 30%, and (3) the CBOT corn Futures Contract expiring in the December following the expiration month of the third to expire contract, weighted 35%. The Teucrium Wheat Fund’s Benchmark is: (1) the second to-expire CBOT wheat Futures Contract, weighted 35%, (2) the third to expire CBOT wheat Futures Contract, weighted 30%, and (3) the CBOT wheat Futures Contract expiring in the December following the expiration month of the third to expire contract, weighted 35%. The Teucrium Soybean Fund’s Benchmark is: (1) the second-to-expire CBOT soybean Futures Contract, weighted 35%, (2) the third to expire CBOT soybean Futures Contract, weighted 30%, and (3) the CBOT soybean Futures Contract expiring in the November following the expiration month of the third to expire contract, weighted 35%, except that CBOT soybean Futures Contracts expiring in August and September will not be part of the Teucrium Soybean Fund’s Benchmark because of the less liquid market for these Futures Contracts. The Teucrium Sugar Fund’s Benchmark is: (1) the second-to-expire Sugar No. 11 Futures Contract traded on ICE Futures US (“ICE Futures”), weighted 35%, (2) the third to expire ICE Futures Sugar No. 11 Futures Contract, weighted 30%, and (3) the ICE Futures Sugar No. 11 Futures Contract expiring in the March following the expiration month of the third to expire contract, weighted 35%.
While the Fund expects to maintain substantially all of its assets in shares of the Underlying Funds at all times, the Fund may hold some residual amount of assets in obligations of the United States government (“Treasury Securities”) or cash equivalents, and/or merely hold such assets in cash (generally in interest-bearing accounts). The Underlying Funds invest in Commodity Interests to the fullest extent possible without being leveraged or unable to satisfy their expected current or potential margin or collateral obligations with respect to their investments in Commodity Interests. After fulfilling such margin and collateral requirements, the Underlying Funds will invest the remainder of the proceeds from the sale of baskets in short term Treasury Securities or cash equivalents, and/or merely hold such assets in cash. Therefore, the focus of the Sponsor in managing the Underlying Funds is investing in Commodity Interests and in cash and/or cash equivalents. The Fund and Underlying Funds will earn interest income from the short term Treasury Securities and/or cash equivalents that it purchases and on the cash, it holds through the Fund’s custodian.
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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 Fund’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 well as the most recent Form S-1 filing, as applicable. The operating results for the three and six months ended June 30, 2019 are not necessarily indicative of the results to be expected for the full year ending December 31, 2019.
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
The Sponsor employs U.S. Bank N.A. 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 doing business as U.S. Bank Global Fund Services ("Fund Services") is 615 E. Michigan Street, Milwaukee, WI 53202. In addition, effective on the Conversion Date, Fund Services, 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 Fund Services 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 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 statements of operations. A summary of these expenses is included below. Pursuant to a Consulting Services Agreement, Foreside Consulting Services, LLC, performs certain consulting support services for the Trust's Sponsor. Additionally, Foreside Distributors, LLC performs certain distribution consulting services pursuant to a Distribution Consulting Agreement with the Trust's Sponsor.
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 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 statements of operations. A summary of these expenses is included below.
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The Sponsor employs Exchange Traded Concepts, LLC ("ETC") as the Marketing Agent, providing certain marketing consulting services in connection with the content strategy and e-mail marketing for the Funds. For its services as the Marketing Agent, ETC receives $5,000 a month and 0.02% of the Fund's average daily net assets, when assets are above the combined amount of $160 million. These services are recorded in distribution and marketing fees on the statements of the operations. A summary of these expenses is included below:

| Three months ended June 30, 2019 | Three months ended June 30, 2018 | Six months ended June 30, 2019 | Six months ended June 30, 2018
Amount Recognized for Custody Services | $544 | $661 | $1,332 | $1,220
Amount of Custody Services Waived | $544 | $634 | $1,332 | $1,091
Amount Recognized for Distribution Services | $216 | $302 | $548 | $549
Amount of Distribution Services Waived | $216 | $225 | $457 | $472
Amount Recognized for Brokerage Commissions | $- | $- | $- | $-
Amount of Brokerage Commissions Waived | $- | $- | $- | $-
Amount Recognized for Wilmington Trust | $- | $- | $- | $-
Amount of Wilmington Trust Waived | $- | $- | $- | $-
Amount Recognized for Marketing Agent | $87 | $- | $87 | $-
Amount of Marketing Agent Waived | $87 | $- | $87 | $-

Note 3 – Summary of Significant Accounting Policies
Basis of Presentation
The accompanying financial statements have been prepared in accordance 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.
Revenue Recognition
Investment transactions are accounted for on a trade-date basis. All such transactions are recorded on the identified cost basis and marked to market daily. Unrealized appreciation or depreciation on investments are reflected in the statements of assets and liabilities as the difference between the original 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 statements of operations.
The Sponsor adopted ASC 606, Revenue from Contracts With Customers, for the year ended December 31, 2018. The adoption did not have a material impact on the financial statements of the Trust or the Fund.
Brokerage Commissions
Brokerage commissions are accrued on the trade date and on a full-turn basis.
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Income Taxes
For federal income tax purposes, the Fund will be treated as a publicly traded partnership. A publicly traded partnership is generally treated as a corporation for federal income tax purposes unless 90% or more of the publicly traded partnership’s gross income for each taxable year of its existence consists of qualifying income as defined in section 7704(d) of the Internal Revenue Code of 1986, as amended. Qualifying income is defined as generally including, in pertinent part, interest (other than from a financial business), dividends, and gains from the sale or disposition of capital assets held for the production of interest or dividends. In the case of a partnership of which a principal activity is the buying and selling of commodities, other than as inventory, or of futures, forwards and options with respect to commodities, qualifying income also includes income and gains from commodities and from futures, forwards, options with respect to commodities and, provided the partnership is a trader or investor with respect to such assets, swaps and other notional principal contracts with respect to commodities. The Fund expects that at least 90% of the Fund’s gross income for each taxable year will consist of qualifying income and that the Fund will be taxed as a partnership for federal income tax purposes. The Fund does not record a provision for income taxes because the shareholders report their share of the Fund’s income or loss on their income tax returns. The financial statements reflect the Fund’s transactions without adjustment, if any, required for income tax purposes.
The Fund is 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 Fund files an income tax return in the U.S. federal jurisdiction, and may file income tax returns in various U.S. states and foreign jurisdictions. For all tax years 2016 to 2018, the Fund remains 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 Fund recording a tax liability that reduces net assets. This policy has been applied to all existing tax positions upon the Fund’s initial adoption. Based on its analysis, the Fund has determined that it has not incurred any liability for unrecognized tax benefits as of June 30, 2019 and for the years ended December 31, 2018, 2017 and 2016. However, the Fund’s 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 Fund recognizes 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 six months ended June 30, 2019 and 2018.
The Fund 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 Fund’s 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 Fund and did not have a significant impact on the financial statements of the Fund.
Creations and Redemptions
Effective August 28, 2018, the Sponsor filed a prospectus supplement updating the Creation and Redemption Basket size to 12,500 shares. Prior to this prospectus supplement, the basket size for Creations and Redemptions was 25,000 shares.
Authorized Purchasers may purchase Creation Baskets consisting of 12,500 shares from the 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 the Fund only in blocks of 12,500 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.
The Fund will receive the proceeds from shares sold or will pay for redeemed shares within three business days after the trade date of the purchase or redemption, respectively. The amounts due from Authorized Purchasers will be reflected in the Fund’s statements of assets and liabilities as receivable for shares sold. Amounts payable to Authorized Purchasers upon redemption will be reflected in the Fund’s statements of assets and liabilities as payable for shares redeemed.
As outlined in the most recent Form S-1 filing, 50,000 shares represents four Redemption Baskets for the Fund and a minimum level of shares. If the 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.
Allocation of Shareholder Income and Losses
Profit or loss is allocated among the shareholders of the Fund in proportion to the number of shares each shareholder holds as of the close of each month.
Cash and Cash Equivalents
Cash equivalents are highly-liquid investments with maturity dates of 90 days or less when acquired. The Fund reported its cash equivalents in the 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. The Fund has these balances of its assets on deposit with banks. Assets deposited with a financial institution may, at times, exceed federally insured limits. TAGS had a balance of $2,740 and $2,862 in money market funds at June 30, 2019 and December 31, 2018, respectively; these balances are included in cash equivalents on the statements of assets and liabilities.
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Payable/Receivable for Securities Purchased/Sold
Due from/to broker for investments in securities are securities transactions pending settlement. The Fund is 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 Funds monitors the financial condition of such brokers and does not anticipate any losses from these counterparties.
Calculation of Net Asset Value
The Fund’s NAV is calculated by:

● | Taking the current market value of its total assets and

● | Subtracting any liabilities.

The administrator, Fund Services, will calculate the NAV of the Fund once each trading day. It will calculate the NAV as of the earlier of the close of the New York Stock Exchange or 4:00 p.m. New York time. The NAV for a particular trading day will be released after 4:15 p.m. New York time.
For purposes of the determining the Fund’s NAV, the Fund’s investments in the Underlying Funds will be valued based on the Underlying Funds’ NAVs. In turn, in determining the value of the Futures Contracts held by the Underlying Funds, the Administrator will use the closing price on the exchange on which they are traded. The Administrator will determine the value of all other Fund and Underlying Fund investments as of the earlier of the close of the New York Stock Exchange or 4:00 p.m. New York time, in accordance with the current Services Agreement between the Administrator and the Trust. The value of over-the-counter Commodity Interests will be determined based on the value of the commodity or Futures Contract underlying such Commodity Interest, except that a fair value may be determined if the Sponsor believes that the Underlying Fund is subject to significant credit risk relating to the counterparty to such Commodity Interest. For purposes of financial statements and reports, the Sponsor will recalculate the NAV of an Underlying Fund where necessary to reflect the “fair value” of a Futures Contract held by an Underlying Fund when a Futures Contract held by an Underlying Fund closes at its price fluctuation limit for the day. Short term Treasury Securities held by the Fund or Underlying Funds will be valued by the Administrator using values received from recognized third-party vendors (such as Reuters) and dealer quotes. NAV will include any unrealized profit or loss on open Commodity Interests and any other credit or debit accruing to the Fund but unpaid or not received by the Fund.
Sponsor Fee Allocation of Expenses and Related Party Transactions
The Sponsor is responsible for investing the assets of the Fund in accordance with the objectives and policies of the 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 Fund is 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 Fund generally pays 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 Fund also pays its portion of 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 funds based on activity drivers deemed most appropriate by the Sponsor for such expenses, including but not limited to relative assets under management and creation 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 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 Funds, which are primarily the cost of performing accounting and financial reporting, regulatory compliance, and trading activities that are directly attributable to the Fund. Such expenses are primarily recorded as distribution and marketing fees on the statement of operations. All asset-based fees and expenses for the Funds are calculated on the prior day’s net assets.

| Three months ended June 30, 2019 | Three months ended June 30, 2018 | Six months ended June 30, 2019 | Six months ended June 30, 2018
Recognized Related Party Transactions | $2,741 | $3,563 | $8,774 | $8,630
Waived Related Party Transactions | $2,741 | $2,439 | $7,547 | $5,506

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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:

| TAGS
Three months ended June 30, 2019 | $7,181
Three months ended June 30, 2018 | $10,086
Six months ended June 30, 2019 | $28,765
Six months ended June 30, 2018 | $27,301

Expenses
Expenses are recorded using the accrual method of accounting.
Use of Estimates
The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America 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.
New Accounting Pronouncements
The Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2019-04: “Codification Improvements to Topic 326, Financial Instruments – Credit Losses, Topic 815, Derivatives and hedging, and Topic 825, Financial Instruments.” The amendments clarify and improve areas of guidance related to the recently issued standards on credit losses, hedging, and recognition and measurement, specifically relating to ASU 2017-12. The amendments were adopted for the quarter ended June 30, 2019; the adoption did not have a material impact on the financial statements and disclosures of the Trust or the Fund.
The FASB issued ASU 2019-01: "Leases (Topic 842): Codification Improvements. These amendments align the guidance for fair value of underlying assets by lessors that are not manufacturers or dealers in Topic 842 with that of existing guidance. 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 but the amendment is not expected to have a material impact on the financial statements of the Trust or the Fund.
The FASB issued 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 Fund.
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 Fund.
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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 Fund.
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 were adopted for the quarter ended June 30, 2019; the adoption did not have a material impact on the financial statements and disclosures of the Trust or the Fund.
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 were adopted for the quarter ended March 31, 2019; the adoption did not have a material impact on the financial statements and disclosures of the Trust or the Fund.
Fair Value - Definition and Hierarchy
In accordance with 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 Fund uses various valuation approaches. In accordance with 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 Fund. Unobservable inputs reflect the Fund’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 Fund has the ability to access. Valuation adjustments and block discounts are not applied to Level 1 financial instruments of the Underlying Funds and securities of the Fund, together the “financial instruments”. Since valuations are based on quoted prices that are readily and regularly available in an active market, valuation of these financial instruments 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.
Net Income (Loss) per Share
Net income (loss) per share is the difference between the NAV per unit at the beginning of each period and at the end of each period. The weighted average number of units outstanding was computed for purposes of disclosing net income (loss) per weighted average unit. The weighted average units are equal to the number of units outstanding at the end of the period, adjusted proportionately for units created or redeemed based on the amount of time the units were outstanding during such period.
Note 4 – Fair Value Measurements
The Fund’s assets and liabilities recorded at fair value have been categorized based upon a fair value hierarchy as described in the Fund’s significant accounting policies in Note 2. The following table presents information about the Fund’s assets and liabilities measured at fair value as of June 30, 2019 and December 31, 2018:
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June 30, 2019

Assets: | Level 1 | Level 2 | Level 3 | Balance as of June 30, 2019
Exchange Traded Funds | $1,508,928 | $- | $- | $1,508,928
Cash Equivalents | 2,740 | - | - | 2,740
Total | $1,511,668 | $- | $- | $1,511,668

December 31, 2018

Assets: | Level 1 | Level 2 | Level 3 | Balance as of December 31, 2018
Exchange Traded Funds | $1,523,286 | $- | $- | $1,523,286
Cash Equivalents | 2,862 | - | - | 2,862
Total | $1,526,148 | $- | $- | $1,526,148

For the six months ended June 30, 2019 and year ended December 31, 2018, the Fund did not have any transfers between any of the level 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 – Financial Highlights
The following table presents per unit performance data and other supplemental financial data for the three and six months ended June 30, 2019 and 2018. This information has been derived from information presented in the financial statements. This information has been derived from information presented in the financial statements and is presented with total expenses gross of expenses waived by the Sponsor and with total expenses net of expenses waived by the Sponsor, as appropriate.

| Three months ended June 30, 2019 | Three months ended June 30, 2018 | Six months ended June 30, 2019 | Six months ended June 30, 2018
Per Share Operation Performance |  |  |  |
Net asset value at beginning of period | $19.51 | $22.79 | $20.33 | $22.75
Income (loss) from investment operations: |  |  |  |
Net realized and unrealized gain (loss) on investment transactions | 0.64 | (1.65) | (0.17) | (1.58)
Total expenses, net | (0.01) | (0.03) | (0.02) | (0.06)
Net increase (decrease) in net asset value | 0.63 | (1.68) | (0.19) | (1.64)
Net asset value at end of period | $20.14 | $21.11 | $20.14 | $21.11
Total Return | 3.23% | (7.37)% | (0.93)% | (7.21)%
Ratios to Average Net Assets (Annualized) |  |  |  |
Total expenses | 2.15% | 2.99% | 4.06% | 4.47%
Total expenses, net | 0.19% | 0.50% | 0.19% | 0.50%
Net investment loss | (0.19)% | (0.50)% | (0.19)% | (0.50)%

The financial highlights per share data are calculated consistent with the methodology used to calculate asset-based fees and expenses.
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Note 6 – Organizational and Offering Costs
Expenses incurred in organizing of the Trust and the initial offering of the Shares of the Fund, including applicable SEC registration fees, were borne directly by the Sponsor. The Fund will not be obligated to reimburse the Sponsor.
Note 7 – Subsequent Events
Management has evaluated the financial statements for the quarter-ended June 30, 2019 for subsequent events through the date of this filing and noted no material events requiring either recognition through the date of the filing or disclosure herein for the Fund.
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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.
This information should be read in conjunction with the financial statements and notes included in Item 1 of Part I of this Quarterly Report (the “Report”). The discussion and analysis which follows may contain trend analysis and other forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934 which reflect our current views with respect to future events and financial results. Words such as “anticipate,” “expect,” “intend,” “plan,” “believe,” “seek,” “outlook” and “estimate,” as well as similar words and phrases, signify forward-looking statements. Teucrium Commodity Trust’s (the “Trust’s”) forward-looking statements are not a guarantee of future results and conditions, and important factors, risks and uncertainties may cause our actual results to differ materially from those expressed in our forward-looking statements.
You should not place undue reliance on any forward-looking statements. Except as expressly required by the Federal securities laws, Teucrium Trading, LLC (the “Sponsor”) undertakes no obligation to publicly update or revise any forward-looking statements or the risks, uncertainties or other factors described in this Report, as a result of new information, future events or changed circumstances or for any other reason after the date of this Report.
Overview/Introduction
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 of the 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 29, 2019, the Trust and the Funds operate pursuant to the Trust’s Fifth 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, 2019.
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 April 29, 2019. This registration statement for WEAT registered an additional 30,000,000 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 Funds are designed and managed so that the daily changes in percentage terms of the Shares’ Net Asset Value (“NAV”) reflect the daily changes in percentage terms of a weighted average of the closing settlement prices for specific futures contracts on designated commodities (each, a “Designated Commodity”) or the closing Net Asset Value per share of the Underlying Funds (as defined below) in the case of TAGS. Each Fund pursues its investment objective by investing in a portfolio of exchange-traded futures contracts (each, a “Futures Contract”) that expire in a specific month and trade on a specific exchange in the Specified Commodity comprising the Benchmark, as defined below or shares of the Underlying Funds in the case of TAGS. Each Fund has the ability to hold United States Treasury Obligations and/or other high credit quality short-term fixed income securities for deposit with the commodity broker of the Funds as margin and/or on deposit with the Custodian or other financial institutions.
The Investment Objective of the Funds
The investment objective of CORN is to have the daily changes in percentage terms of the Shares’ Net Asset Value (“NAV”) reflect the daily changes in percentage terms of a weighted average of the closing settlement prices for three futures contracts for corn (“Corn Futures Contracts”) that are traded on the Chicago Board of Trade (“CBOT”):
CORN Benchmark

CBOT Corn Futures Contract | Weighting
Second to expire | 35%
Third to expire | 30%
December following the third to expire | 35%

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The investment objective of SOYB is to have the daily changes in percentage terms of the Shares’ Net Asset Value (“NAV”) reflect the daily changes in percentage terms of a weighted average of the closing settlement prices for three futures contracts for soybeans (“Soybeans Futures Contracts”) that are traded on the Chicago Board of Trade (“CBOT”):
SOYB Benchmark

CBOT Soybeans Futures Contract | Weighting
Second to expire (excluding August & September) | 35%
Third to expire (excluding August & September) | 30%
Expiring in the November following the expiration of the third to expire contract | 35%

The investment objective of CANE is to have the daily changes in percentage terms of the Shares’ Net Asset Value (“NAV”) reflect the daily changes in percentage terms of a weighted average of the closing settlement prices for three futures contracts for No. 11 sugar (“Sugar Futures Contracts”) that are traded on the ICE Futures US (“ICE”):
CANE Benchmark

ICE Sugar Futures Contract | Weighting
Second to expire | 35%
Third to expire | 30%
Expiring in the March following the expiration of the third to expire contract | 35%

The investment objective of WEAT is to have the daily changes in percentage terms of the Shares’ Net Asset Value (“NAV”) reflect the daily changes in percentage terms of a weighted average of the closing settlement prices for three futures contracts for wheat (“Wheat Futures Contracts”) that are traded on the Chicago Board of Trade (“CBOT”):
WEAT Benchmark

CBOT Wheat Futures Contract | Weighting
Second to expire | 35%
Third to expire | 30%
December following the third to expire | 35%

The investment objective of the TAGS is to have the daily changes in percentage terms of the NAV of its 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: the Teucrium Corn Fund, the Teucrium Wheat Fund, the Teucrium Soybean Fund and the Teucrium Sugar Fund (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, generally on a daily basis, to maintain the approximate 25% allocation to each Underlying Fund:
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TAGS Benchmark

Underlying Fund | Weighting
CORN | 25%
SOYB | 25%
CANE | 25%
WEAT | 25%

This weighted average of the referenced specific Futures Contracts for each Fund is referred to herein as the “Benchmark,” and the specific Futures Contracts that at any given time make up the Benchmark for that Fund and are referred to herein as the “Benchmark Component Futures Contracts.”
The notional amount of each Benchmark Component Futures Contract included in each Benchmark is intended to reflect the changes in market value of each such Benchmark Component Futures Contract within the Benchmark. The closing level of each Benchmark is calculated on each business day by U.S. Bank Global Fund Services (” Fund Services”) based on the closing price of the futures contracts for each of the underlying Benchmark Component Futures Contracts and the notional amounts of such Benchmark Component Futures Contracts.
Each Benchmark is rebalanced periodically to ensure that each of the Benchmark Component Futures Contracts is weighted in the same proportion as in the investment objective for each Fund. The following tables reflect the June 30, 2019, Benchmark Component Futures Contracts weights for each of the Funds, the contract held is identified by the generally accepted nomenclature of contract month and year, which may differ from the month in which the contract expires:

CORN Benchmark Component Futures Contracts | Notional Value | Weight (%)
CBOT Corn Futures (1,561 contracts, SEP19) | $33,151,738 | 34%
CBOT Corn Futures (1,318 contracts, DEC19) | 28,435,850 | 29
CBOT Corn Futures (1,675 contracts, DEC20) | 34,819,062 | 36
Total at June 30, 2019 | $96,406,650 | 100%

SOYB Benchmark Component Futures Contracts | Notional Value | Weight (%)
CBOT Soybean Futures (250 contracts, NOV19) | $11,537,500 | 35%
CBOT Soybean Futures (212 contracts, JAN20) | 9,905,700 | 30
CBOT Soybean Futures (244 contracts, NOV20) | 11,608,300 | 35
Total at June 30, 2019 | $33,051,500 | 100%

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CANE Benchmark Component Futures Contracts | Notional Value | Weight (%)
ICE Sugar Futures (228 contracts, MAR20) | $3,460,128 | 35%
ICE Sugar Futures (195 contracts, MAY20) | 2,976,792 | 30
ICE Sugar Futures (219 contracts, MAR21) | 3,492,787 | 35
Total at June 30, 2019 | $9,929,707 | 100%

WEAT Benchmark Component Futures Contracts | Notional Value | Weight (%)
CBOT Wheat Futures (776 contracts, SEP19) | $20,457,300 | 35%
CBOT Wheat Futures (653 contracts, DEC19) | 17,582,025 | 30
CBOT Wheat Futures (733 contracts, DEC20) | 20,652,275 | 35
Total at June 30, 2019 | $58,691,600 | 100%

TAGS Benchmark Component Futures Contracts | Fair Value | Weight (%)
Shares of Teucrium Corn Fund (22,658 shares) | $371,682 | 25%
Shares of Teucrium Soybean Fund (24,181 shares) | 380,232 | 25
Shares of Teucrium Wheat Fund (66,037 shares) | 380,036 | 25
Shares of Teucrium Sugar Fund (53,124 shares) | 376,978 | 25
Total at June 30, 2019 | $1,508,928 | 100%

The price relationship between the near month Futures Contract to expire and the Benchmark Component Futures Contracts will vary and may impact both the total return of each Fund over time and the degree to which such total return tracks the total return of the price indices related to the commodity of each Fund. In cases in which the near month contract’s price is lower than later-expiring contracts’ prices (a situation known as “contango” in the futures markets), then absent the impact of the overall movement in commodity prices the value of the Benchmark Component Futures Contracts would tend to decline as they approach expiration. In cases in which the near month contract’s price is higher than later-expiring contracts’ prices (a situation known as “backwardation” in the futures markets), then absent the impact of the overall movement in a Fund’s prices the value of the Benchmark Component Futures Contracts would tend to rise as they approach expiration, all other things being equal.
The total portfolio composition for each Fund is disclosed each business day that the NYSE Arca is open for trading on the Fund’s website. The website for CORN is www.teucriumcornfund.com. for CANE is www.teucriumcanefund.com. for SOYB is www.teucriumsoybfund.com. for WEAT is www.teucriumweatfund.com. for TAGS is www.teucriumtagsfund.com. These sites are accessible at no charge. The website disclosure of portfolio holdings is made daily and includes, as applicable, the name and value of each Futures Contract, other commodity interests and the amount of cash and cash equivalents held in the Fund’s portfolio. The specific types of other commodity interests held (if any, which may include options on futures contracts and derivative contracts such as swaps) (collectively, “Other Commodity Interests,” and together with Futures Contracts, “Commodity Interests” or “Interests”) (in addition to futures contracts, options on futures contracts and derivative contracts) that are tied to various commodities are entered into outside of public exchanges. These “over-the-counter” contracts are entered into between two parties in private contracts, or on a swap execution facility (“SEF”) for standardized swaps. For example, unlike Futures Contracts, which are guaranteed by a clearing organization, each party to an over-the-counter derivative contract bears the credit risk of the other party (unless such over-the-counter swap is cleared through a derivatives clearing organization (“DCO”)), i.e., the risk that the other party will not be able to perform its obligations under its contract, and characteristics of such Other Commodity Interests.
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Consistent with achieving a Fund’s investment objective of closely tracking the Benchmark, the Sponsor may for certain reasons cause the Fund to enter into or hold Futures Contracts other than the Benchmark Component Futures Contracts and/or Other Commodity Interests. Other Commodity Interests that do not have standardized terms and are not exchange traded, referred to as “over-the-counter” Commodity Interests, can generally be structured as the parties to the Commodity Interest contract desire. Therefore, each Fund might enter into multiple and/or over-the-counter Interests intended to replicate the performance of each of the Benchmark Component Futures Contracts for the Fund, or a single over-the-counter Interest designed to replicate the performance of the Benchmark as a whole. Assuming that there is no default by a counterparty to an over-the-counter Interest, the performance of the Interest will necessarily correlate with the performance of the Benchmark or the applicable Benchmark Component Futures Contract. Each Fund might also enter into or hold Interests other than Benchmark Component Futures Contracts to facilitate effective trading, consistent with the discussion of the Fund’s “roll” strategy. In addition, each Fund might enter into or hold Interests that would be expected to alleviate overall deviation between the Fund’s performance and that of the Benchmark that may result from certain market and trading inefficiencies or other reasons. By utilizing certain or all of the investments described above, the Sponsor will endeavor to cause the Fund’s performance to closely track that of the Benchmark of the Fund.
An “exchange for related position” (“EFRP”) can be used by the Fund as a technique to facilitate the exchanging of a futures hedge position against a creation or redemption order, and thus the Fund may use an EFRP transaction in connection with the creation and redemption of shares. The market specialist/market maker that is the ultimate purchaser or seller of shares in connection with the creation or redemption basket, respectively, agrees to sell or purchase a corresponding offsetting futures position which is then settled on the same business day as a cleared futures transaction by the FCMs. The Fund will become subject to the credit risk of the market specialist/market maker until the EFRP is settled within the business day, which is typically 7 hours or less. The Fund reports all activity related to EFRP transactions under the procedures and guidelines of the CFTC and the exchanges on which the futures are traded.
The Funds earn interest and other income (“interest income”) from cash equivalents that it purchases and on the cash it holds through the Custodian or other financial institution. The Sponsor anticipates that the interest income will increase the NAV of each Fund. The Funds apply the interest income to the acquisition of additional investments or use it to pay its expenses. If the Fund reinvests the earned interest income, it makes investments that are consistent with its investment objectives as disclosed. Any cash equivalent invested by a Fund will have original maturity dates of three months or less at inception. Any cash equivalents invested by a Fund will be deemed by the Sponsor to be of investment grade quality. At the end of the quarter, available cash balances in each of the Funds were invested in the Fidelity Institutional Money Market Funds – Government Portfolio, in demand deposits at Rabobank, N.A, and in commercial paper with maturities of ninety days or less. On February 1, 2019, in CORN, SOYB, CANE, and WEAT, the Sponsor elected to invest a portion of the amount of funds required to be on deposit with the FCM as initial margin in U.S. Treasury obligations with time to maturity of 90 days or less. The obligations are purchased and held in the respective Fund accounts through the FCM.
In managing the assets of the Funds, the Sponsor does not use a technical trading system that automatically issues buy and sell orders. Instead, the Sponsor will purchase or sell the specific underlying Commodity Interests with an aggregate market value that approximates the amount of cash received or paid upon the purchase or redemption of Shares.
The Sponsor does not anticipate letting the commodity Futures Contracts of any Fund expire, thus taking delivery of the underlying commodity. Instead, the Sponsor will close out existing positions, for instance, in response to ongoing changes in the Benchmark or if it otherwise determines it would be appropriate to do so and reinvest the proceeds in new Commodity Interests. Positions may also be closed out to meet redemption orders, in which case the proceeds from closing the positions will not be reinvested.
The Sponsor employs a “neutral” investment strategy intended to track the changes in the Benchmark of each Fund regardless of whether the Benchmark goes up or goes down. The Fund’s “neutral” investment strategy is designed to permit investors generally to purchase and sell the Fund’s Shares for the purpose of investing indirectly in the commodity-specific market in a cost-effective manner. Such investors may include participants in the specific industry and other industries seeking to hedge the risk of losses in their commodity-specific-related transactions, as well as investors seeking exposure to that commodity market. Accordingly, depending on the investment objective of an individual investor, the risks generally associated with investing in the commodity-specific market and/or the risks involved in hedging may exist. In addition, an investment in a Fund involves the risks that the changes in the price of the Fund’s Shares will not accurately track the changes in the Benchmark, and that changes in the Benchmark will not closely correlate with changes in the price of the commodity on the spot market. The Sponsor does not intend to operate each Fund in a fashion such that its per share NAV equals, in dollar terms, the spot price of the commodity or the price of any particular commodity-specific Futures Contract.
The Sponsor
Teucrium Trading, LLC is the sponsor of the Trust and each of the series of the Trust. The Sponsor is a Delaware limited liability company, formed on July 28, 2009. The principal office is located at Three Main Street, Suite 215, Burlington, Vermont 05401. The Sponsor is registered as a commodity pool operator (“CPO”) with the Commodity Futures Trading Commission (“CFTC”) and became a member of the National Futures Association (“NFA”) on November 10, 2009. The Trust and the Funds operate pursuant to the Trust Agreement. The Sponsor registered as a Commodity Trading Advisor ("CTA") with the CFTC effective September 8, 2017.
Under the Trust Agreement, the Sponsor is solely responsible for the management, and conducts or directs the conduct of the business of the Trust, the Funds, and any other Fund that may from time to time be established and designated by the Sponsor. The Sponsor is required to oversee the purchase and sale of Shares by firms designated as “Authorized Purchasers” and to manage the Funds’ investments, including to evaluate the credit risk of futures commission merchants and swap counterparties and to review daily positions and margin/collateral requirements. The Sponsor has the power to enter into agreements as may be necessary or appropriate for the offer and sale of the Funds’ Shares and the conduct of the Trust’s activities. Accordingly, the Sponsor is responsible for selecting the Trustee, Administrator, Distributor, the independent registered public accounting firm of the Trust, and any legal counsel employed by the Trust. The Sponsor is also responsible for preparing and filing periodic reports on behalf of the Trust with the SEC and providing any required certification for such reports. No person other than the Sponsor and its principals was involved in the organization of the Trust or the Funds.
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Teucrium Trading, LLC designs the Funds to offer liquidity, transparency, and capacity in single-commodity investing for a variety of investors, including institutions and individuals, in an exchange-traded product format. The Funds have also been designed to mitigate the impacts of contango and backwardation, situations that can occur in the course of commodity trading which can affect the potential returns to investors. Backwardation is defined as a market condition in which a futures price of a commodity is lower in the distant delivery months than in the near delivery months, while contango, the opposite of backwardation, is defined as a condition in which distant delivery prices for futures exceed spot prices, often due to the costs of storing and insuring the underlying commodity.
The Sponsor has a patent on certain business methods and procedures used with respect to the Funds.
Performance Summary
This report covers the periods from January 1 to June 30, 2019 for each Fund. Total expenses are presented both gross and net of any expenses waived or paid by the Sponsor that would have been incurred by the Funds (“expenses waived by the Sponsor”).

CORN Per Share Operation Performance |
Net asset value at beginning of period | $16.11
Income from investment operations: |
Investment income | 0.22
Net realized and unrealized gain on commodity futures contracts | 0.37
Total expenses | (0.30)
Net increase in net asset value | 0.29
Net asset value end of period | $16.40
Total Return | 1.80%
Ratios to Average Net Assets (Annualized) |
Total expenses | 3.77%
Total expenses, net | 3.75%
Net investment loss | (1.06)%
SOYB Per Share Operation Performance |
Net asset value at beginning of period | $16.20
Loss from investment operations: |
Investment income | 0.21
Net realized and unrealized loss on commodity futures contracts | (0.39)
Total expenses | (0.30)
Net decrease in net asset value | (0.48)
Net asset value at end of period | $15.72
Total Return | (2.96)%
Ratios to Average Net Assets (Annualized) |
Total expenses | 4.48%
Total expenses, net | 3.75%
Net investment loss | (1.08)%

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CANE Per Share Operation Performance |
Net asset value at beginning of period | $7.07
Income from investment operations: |
Investment income | 0.09
Net realized and unrealized gain on commodity futures contracts | 0.07
Total expenses | (0.13)
Net increase in net asset value | 0.03
Net asset value at end of period | $7.10
Total Return | 0.42%
Ratios to Average Net Assets (Annualized) |
Total expenses | 5.56%
Total expenses, net | 3.63%
Net investment loss | (1.05)%
WEAT Per Share Operation Performance |
Net asset value at beginning of period | $5.95
Loss from investment operations: |
Investment income | 0.07
Net realized and unrealized loss on commodity futures contracts | (0.17)
Total expenses | (0.10)
Net decrease in net asset value | (0.20)
Net asset value at end of period | $5.75
Total Return | (3.36)%
Ratios to Average Net Assets (Annualized) |
Total expenses | 3.73%
Total expenses, net | 3.72%
Net investment loss | (1.03)%

TAGS Per Share Operation Performance |
Net asset value at beginning of period | $20.33
Loss from investment operations: |
Investment income | 0.00
Net realized and unrealized loss on investment transactions | (0.17)
Total expenses | (0.02)
Net decrease in net asset value | (0.19)
Net asset value at end of period | $20.14
Total Return | (0.93)%
Ratios to Average Net Assets (Annualized) |
Total expenses | 4.06%
Total expenses, net | 0.19%
Net investment loss | (0.19)%

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Past performance of a Fund is not necessarily indicative of future performance.
Results of Operations
The following includes a section for each Fund of the Trust.
The discussion below addresses the material changes in the results of operations for the three and six months ended June 30, 2019 compared to the same periods in 2018. The following includes a section for each Fund of the Trust for the periods in which each Fund was in operation. CORN, SOYB, WEAT, CANE and TAGS each operated for the entirety of all periods.
Total expenses for the current and comparative periods are presented both gross and net of any expenses waived or paid by the Sponsor that would have been incurred by the Funds (“expenses waived by the Sponsor”). For all expenses waived in 2018 and 2019, the Sponsor has determined that no reimbursement will be sought in future periods. “Total expenses, net” is after the impact of any expenses waived by the Sponsor, are presented in the same manner as previously reported. There is, therefore, no impact to or change in the Net gain or Net loss in any period for the Trust and each Fund as a result of this change in presentation.
The Sponsor is responsible for investing the assets of the Fund in accordance with the objectives and policies of the 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 Fund, including services directly attributable to the Fund such as accounting, financial reporting, regulatory compliance and trading activities. In some cases, at its discretion, the Sponsor may elect not to outsource certain of these expenses. 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 Fund generally pays 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, the Financial Industry Regulatory Authority (“FINRA”), 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. Each Fund also pays its portion of 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 funds based on activity drivers deemed most appropriate by the Sponsor for such expenses, including but not limited to relative assets under management and creation 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 statements of operations. A portion of these aggregate common expenses are related to services provided by the Sponsor or related parties of principals of the Sponsor; these are necessary services to the Funds, which are primarily the cost of performing accounting and financial reporting, regulatory compliance, and trading activities that are directly attributable to the Funds and are, primarily, included as distribution and marketing fees on the statements of operations. These amounts, for the Trust and for each Fund, are detailed in the notes to the financial statements included in Part II of this filing.
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.
Teucrium Corn Fund
The Teucrium Corn Fund commenced investment operations on June 9, 2010. The investment objective of the Corn Fund is to have the daily changes in percentage terms of the Shares’ NAV reflect the daily changes in percentage terms of a weighted average of the closing settlement prices for three futures contracts for corn (“Corn Futures Contracts”) that are traded on the Chicago Board of Trade (“CBOT”), specifically (1) the second to expire CBOT Corn Futures Contract, weighted 35%, (2) the third to expire CBOT Corn Futures Contract, weighted 30%, and (3) the CBOT Corn Futures Contract expiring in the December following the expiration month of the third to expire contract, weighted 35%.
On June 30, 2019, the Fund had 5,875,004 shares outstanding and net assets of $96,373,394. This is in comparison to 4,450,004 shares outstanding and net assets of $73,118,194 on June 30, 2018 and 3,600,004 shares outstanding with net assets of $54,796,796 on March 31, 2019. Shares outstanding increased by 1,425,000 or 32% for the period ended June 30, 2019 when compared to June 30, 2018 and increased by 2,275,000 or 63% for the period ended June 30, 2019 when compared to March 31, 2019. This increase year over year was, in the opinion of management, due to the continued low price of corn relative to historical levels and concerns over the U.S. weather during the planting period.
Total net assets for the Fund were $96,373,394 on June 30, 2019 compared to $73,118,194 on June 30, 2018 and $54,796,796 on March 31, 2019. The Net Asset Values (“NAV”) per share related to these balances were $16.40, $16.43 and $15.22, respectively. This represents an increase in total net assets year over year of 32%, driven by an increase in total shares outstanding of 32%. When comparing June 30, 2019 with March 31, 2019, there was an increase in total net assets of 76%, driven by a combination of an increase in total shares outstanding of 63% and an increase in the NAV per share of $1.18 or 8%. The closing prices per share for June 30, 2019 and 2018 and March 31, 2019, as reported by the NYSE Arca, were $16.44, $16.44 and $15.23, respectively. The change from June 30, 2019 over the same period last year was a 0% change, and an 8% increase from March 31, 2019.
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The graph below shows the actual shares outstanding, total net assets (or AUM) and net asset value per share (NAV per share) for the Fund from inception to June 30, 2019 and serves to illustrate the relative changes of these components.
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The total income for the three-month period ended June 30, 2019 was $4,818,848 resulting primarily from the net change in realized loss on commodity futures contracts totaling ($2,187,325), and by a net change in unrealized appreciation of commodity futures contracts of $6,531,538. Total loss was ($6,465,079) in the same period of 2018. The total income for the six-month period ended June 30, 2019 was $2,177,067 resulting primarily from the net change in realized loss on commodity futures contracts totaling ($3,093,050), and by a net change in unrealized appreciation of commodity futures contracts of $4,416,538. Total loss was ($957,869) in the same period of 2018. Realized gain or loss on trading of commodity futures contracts is a function of: 1) the change in the price of the particular contracts sold as part of a “roll” in contracts as the nearest to expire contracts are exchanged for the appropriate contact given the investment objective of the fund, 2) the change in the price of particular contracts sold in relation to redemption of shares, 3) the gain or loss associated with rebalancing trades which are made to ensure conformance to the benchmark and 4) the number of contracts held and then sold for either circumstance aforementioned. Unrealized gain or loss on trading of commodity futures contracts is a function of the change in the price of contracts held on the final date of the period versus the purchase price for each contract and the number of contracts held in each contract month. The Sponsor has a static benchmark as described above and trades futures contracts to adhere to that benchmark and to adjust for the creation or redemption of shares.
Interest income and other income for the three-month period ended June 30, 2019 and 2018, respectively, was $474,635 and $393,434. Interest income and other income for the six-month period ended June 30, 2019 and 2018, respectively, was $853,579 and $680,931. This increase year over year was partially the result of the Sponsor investing, at times, a portion of the available cash for the Fund in alternative demand deposit savings accounts with more attractive overnight deposit rates. The Fund also invests in investment grade commercial paper with maturities of ninety days or less, these investments provide a higher rate than money market products offered in the past. Effective February 1, 2019, the Fund began investing a portion of the cash held at the broker for initial margin in short-term U.S. Treasury Securities. Interest rates paid on cash balances of the Fund have increased beginning March 2017 and have continued to increase through June 2019. These higher levels of interest rates are projected to decline in 2019.
Total expenses gross of expenses waived by the Sponsor and reimbursement to the Sponsor for previously waived expenses (“Total expenses”) for the three-month period ended June 30, 2019 were $682,968 and for the same period in 2018 were $754,733. This represents a ($71,765) or 10% decrease for 2019 over 2018. The decrease was driven by decreases in all expense categories except in custodian fees and expenses, which increased by $6,796 or 24%. The decreases were specifically: 1) a ($14,512) or 8% decrease in management fee paid to the Sponsor as a result of lower average net assets; 2) a ($1,076) or 1% decrease in professional fees related to auditing, legal and tax preparation fees; and 3) a ($33,578) or 11% decrease in distribution and marketing expenses; 4) a ($4,274) or 55% decrease in business permits and licenses; 5) a ($3,626) or 12% decrease in general and administrative expenses; 6) a ($15,169) or 74% decrease in brokerage commissions due to a decrease in contract purchases and rolled; and 7) a ($6,326) or 64% decrease in other expenses. The decreases were due, in general, to the decrease in the average assets under management relative to the other Funds. The total expense ratio gross of expenses waived by the Sponsor for the three-month periods were 3.86% in 2019 and 3.95% in 2018. The management fee is calculated at an annual rate of 1% of the Fund’s daily average net assets.
Total expenses gross of expenses waived by the Sponsor and reimbursement to the Sponsor for previously waived expenses (“Total expenses”) for the six-month period ended June 30, 2019 were $1,193,207 and for the same period in 2018 were $1,425,617. This represents a ($232,410) or 16% decrease for 2019 over 2018. The decrease was driven by decreases in all expense categories except in custodian fees and expenses, which increased by $2,785 or 5%. The decreases were specifically: 1) a ($44,242) or 12% decrease in management fee paid to the Sponsor as a result of lower average net assets; 2) a ($4,548) or 2% decrease in professional fees related to auditing, legal and tax preparation fees; and 3) a ($123,224) or 20% decrease in distribution and marketing expenses; 4) a ($11,532) or 56% decrease in business permits and licenses; 5) a ($13,212) or 20% decrease in general and administrative expenses; 6) a ($22,542) or 55% decrease in brokerage commissions due to a decrease in contract purchases and rolled; and 8) a ($15,895) or 71% decrease in other expenses. The decreases were due, in general, to the decrease in the average assets under management relative to the other Funds. The total expense ratio gross of expenses waived by the Sponsor for the six-month periods were 3.77% in 2019 and 4.26% in 2018. The management fee is calculated at an annual rate of 1% of the Fund’s daily average net assets.
The Sponsor has the ability to elect to pay certain expenses on behalf of the Fund or waive the management fee. This election is subject to change by the Sponsor, at its discretion. For the three-month period ended June 30, 2019 and 2018, the Sponsor waived fees of $0 and $98,041, respectively. For the six-month period ended June 30, 2019 and 2018, the Sponsor waived fees of $5,639 and $138,723, respectively. The Sponsor has determined that no reimbursement will be sought in future periods for those expenses which have been waived for the period.
Total expenses net of expenses waived by the Sponsor (“Total expenses, net”) for the three-month period ended June 30, 2019 and 2018 were $682,968 and $656,692, respectively. The total expense ratio net of expenses waived by the Sponsor was 3.86% in 2019 and 3.43% in 2018. Net investment loss, which includes the impact of expenses and interest income, was 1.17% in 2019 and 1.37% in 2018.
Total expenses net of expenses waived by the Sponsor (“Total expenses, net”) for the six-month period ended June 30, 2019 and 2018 were $1,187,568 and $1,286,894, respectively. The total expense ratio net of expenses waived by the Sponsor was 3.75% in 2019 and 3.78% in 2018. Net investment loss, which includes the impact of expenses and interest income, was 1.06% in 2019 and 2.83% in 2018.
Other than the management fee to the Sponsor and the brokerage commissions, most of the expenses incurred by the Fund are associated with the day-to-day operation of the Fund and the necessary functions related to regulatory compliance. These are generally based on contracts, which extend for some period of time and up to one year, or commitments regardless of the level of assets under management. The structure of the Fund and the nature of the expenses are such that as total net assets grow, there is a scalability of expenses that may allow the total expense ratio to be reduced. However, if total net assets for the Fund fall, the total expense ratio of the Fund will increase unless additional reductions are made by the Sponsor to the daily expense accrual. The Sponsor can elect to adjust the daily expense accruals at its discretion based on market conditions and other Fund considerations.
The seasonality patterns for corn futures prices are impacted by a variety of factors. These include, but are not limited to, the harvest in the fall, the planting conditions in the spring, and the weather throughout the critical germination and growing periods. Prices for corn futures are affected by the availability and demand for substitute agricultural commodities, including soybeans and wheat, and the demand for corn as an additive for fuel, through the production of ethanol. The price of corn futures contracts is also influenced by global economic conditions, including the demand for exports to other countries. Such factors will impact the performance of the Fund and the results of operations on an ongoing basis. The Sponsor cannot predict the impact of such factors.
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Teucrium Soybean Fund
The Teucrium Soybean Fund commenced investment operations on September 19, 2011. The investment objective of the Fund is to have the daily changes in percentage terms of the Shares’ Net Asset Value (“NAV”) reflect the daily changes in percentage terms of a weighted average of the closing settlement prices for three futures contracts for soybeans (“Soybean Futures Contracts”) that are traded on the Chicago Board of Trade (“CBOT”). The three Soybean Futures Contracts, excluding August and September, will be: (1) second to expire CBOT Soybean Futures Contract, weighted 35%, (2) the third to expire CBOT Soybean Futures Contract, weighted 30%, and (3) the CBOT Soybean Futures Contract expiring in the November following the expiration month of the third to expire contract, weighted 35%.
On June 30, 2019, the Fund had 2,100,004 shares outstanding and net assets of $33,021,388. This is in comparison to 1,050,004 shares outstanding and net assets of $17,029,295 on June 30, 2018 and 1,475,004 shares outstanding with net assets of $23,295,395 on March 31, 2019. Shares outstanding increased by 1,050,000 or 100% for the period ended June 30, 2019 when compared to June 30, 2018 and increased by 625,000 or 42% for the period ended June 30, 2019 when compared to March 31, 2019. The increase year over year is due, in the opinion of management, to the relative low price of soybeans compared to the last decade, coupled with concerns over the U.S. weather during the growing and harvest season and geopolitical concerns over the impact of proposed tariffs, which generated renewed investor focus in the commodity.
Total net assets for the Fund were $33,021,388 on June 30, 2019 compared to $17,029,295 on June 30, 2018 and $23,295,395 on March 31, 2019. The Net Asset Values (“NAV”) per share related to these balances were $15.72, $16.22 and $15.79, respectively. This represents an increase in total net assets for the year over year of 94%, driven by a combination of an increase in total shares outstanding of 100% and a decrease in the NAV per share of ($0.50) or 3%. When comparing June 30, 2019 with March 31, 2019, there was an increase in total net assets of 42%, driven by an increase in total shares outstanding of 42%. The closing prices per share for June 30, 2019 and 2018 and March 31, 2019, as reported by the NYSE Arca, were $15.73, $16.24 and $15.75, respectively. The change from June 30, 2019 over the same period last year was a 3% decrease, and a 0% change from March 31, 2019.
The graph below shows the actual shares outstanding, total net assets (or AUM) and net asset value per share (NAV per share) for the Fund from inception to June 30, 2019 and serves to illustrate the relative changes of these components.
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The total income for the three-month period ended June 30, 2019 was $744,160 resulting primarily from the net change in realized loss on commodity futures contracts totaling ($1,187,050) and by a net change in unrealized appreciation of commodity futures contracts of $1,746,950. Total loss was ($2,378,109) in the same period of 2018. The total income for the six-month period ended June 30, 2019 was $440,915 resulting primarily from the net change in realized loss on commodity futures contracts totaling ($1,153,412) and by a net change in unrealized appreciation of commodity futures contracts of $1,242,075. Total loss was ($1,523,356) in the same period of 2018. Realized gain or loss on trading of commodity futures contracts is a function of: 1) the change in the price of the particular contracts sold as part of a “roll” in contracts as the nearest to expire contracts are exchanged for the appropriate contact given the investment objective of the fund, 2) the change in the price of particular contracts sold in relation to redemption of shares, 3) the gain or loss associated with rebalancing trades which are made to ensure conformance to the benchmark and 4) the number of contracts held and then sold for either circumstance aforementioned. Unrealized gain or loss on trading of commodity futures contracts is a function of the change in the price of contracts held on the final date of the period versus the purchase price for each contract and the number of contracts held in each contract month. The Sponsor has a static benchmark as described above and trades futures contracts to adhere to that benchmark and to adjust for the creation or redemption of shares.
Interest income and other income for the three-month periods ended June 30, 2019 and 2018, respectively, was $184,260 and $80,841. Interest income and other income for the six-month periods ended June 30, 2019 and 2018, respectively, was $352,252 and $130,656. This increase year over year was partially the result of the Sponsor investing, at times, a portion of the available cash for the Fund in alternative demand deposit savings accounts with more attractive overnight deposit rates. The Fund also invests in investment grade commercial paper with maturities of ninety days or less, these investments provide a higher rate than money market products offered in the past. Effective February 1, 2019, the Fund began investing a portion of the cash held at the broker for initial margin in short-term U.S. Treasury Securities. Interest rates paid on cash balances of the Fund have increased beginning March 2017 and have continued to increase through June 2019. These higher levels of interest rates are projected to decline in 2019.
Total expenses gross of expenses waived by the Sponsor and reimbursement to the Sponsor for previously waived expenses (“Total expenses”) for the three-month period ended June 30, 2019 were $303,108 and for the same period in 2018 were $240,283. This represents a $62,825 or 26% increase for 2019 over 2018. The increase year over year was driven by an increase in: 1) a $28,670 or 71% increase in management fees payable to the Sponsor as a result of higher average net assets; 2) a $51,137 or 51% increase in distribution and marketing expenses; 3) a $5,496 or 56% increase in custodian fees and expenses; and 4) a $6,065 or 57% increase in general and administrative expenses. These increases were partially offset by 1) a ($22,889) or a 35% decrease in professional fees related to auditing, legal and tax preparation fees; 2) a ($1,413) or 21% decrease in business permits and licenses; 3) a ($1,023) or 33% decrease in brokerage commissions due to a decrease in contracts purchased and rolled; and 4) a ($3,218) or 82% decrease in other expenses. The increase in expenses is primarily due to higher average net assets in 2019 compared to the other Funds. The total expense ratio gross of expenses waived by the Sponsor for these periods was 4.38% in 2019 and 5.92% in 2018. The management fee is calculated at an annual rate of 1% of the Fund’s daily average net assets.
Total expenses gross of expenses waived by the Sponsor and reimbursement to the Sponsor for previously waived expenses (“Total expenses”) for the six-month period ended June 30, 2019 were $591,947 and for the same period in 2018 were $456,133. This represents a $135,814 or 30% increase for 2019 over 2018. The increase year over year was driven by an increase in: 1) a $61,248 or 87% increase in management fees payable to the Sponsor as a result of higher average net assets; 2) a $6,710 or a 7% increase in professional fees related to auditing, legal and tax preparation fees; 3) a $52,407 or 24% increase in distribution and marketing expenses; 4) a $20,633 or 97% increase in custodian fees and expenses; and 5) a $9,853 or 56% increase in general and administrative expenses. These increases were partially offset by 1) a ($7,108) or 42% decrease in business permits and licenses; 2) a ($1,445) or 26% decrease in brokerage commissions due to a decrease in contracts purchased and rolled; and 3) a ($6,484) or 76% decrease in other expenses. The increase in expenses is primarily due to higher average net assets in 2019 compared to the other Funds. The total expense ratio gross of expenses waived by the Sponsor for these periods was 4.48% in 2019 and 6.45% in 2018. The management fee is calculated at an annual rate of 1% of the Fund’s daily average net assets.
The Sponsor has the ability to elect to pay certain expenses on behalf of the Fund or waive the management fee. This election is subject to change by the Sponsor, at its discretion. For the three-month period ended June 30, 2019 and 2018, the Sponsor waived fees of $33,391 and $84,485. For the six-month period ended June 30, 2019 and 2018, the Sponsor waived fees of $96,303 and $184,427. The Sponsor has determined that no reimbursement will be sought in future periods for those expenses which have been waived for the period.
Total expenses net of expenses waived by the Sponsor (“Total expenses, net”) for the three-month period ended June 30, 2019 and 2018 were $269,717 and $155,798, respectively. The total expense ratio net of expenses waived by the Sponsor periods was 3.90% in 2019 and 3.84% in 2018. Net investment loss, which includes the impact of expenses and interest income, was 1.08% in 2018 and 1.99% in 2018.
Total expenses net of expenses waived by the Sponsor (“Total expenses, net”) for the six-month period ended June 30, 2019 and 2018 were $495,644 and $271,706, respectively. The total expense ratio net of expenses waived by the Sponsor periods was 3.75% in 2019 and 3.84% in 2018. Net investment loss, which includes the impact of expenses and interest income, was 1.08% in 2018 and 1.99% in 2018.
Other than the management fee to the Sponsor and the brokerage commissions, most of the expenses incurred by the Fund are associated with the day-to-day operation of the Fund and the necessary functions related to regulatory compliance. These are generally based on contracts, which extend for some period of time and up to one year, or commitments regardless of the level of assets under management. The structure of the Fund and the nature of the expenses are such that as total net assets grow, there is a scalability of expenses that may allow the total expense ratio to be reduced. However, if total net assets for the Fund fall, the total expense ratio of the Fund will increase unless additional reductions are made by the Sponsor to the daily expense accrual. The Sponsor can elect to adjust the daily expense accruals at its discretion based on market conditions and other Fund considerations.
The seasonality patterns for soybean futures prices are impacted by a variety of factors. These include, but are not limited to, the harvest in the fall, the planting conditions in the spring, and the weather throughout the critical germination and growing periods. Prices for soybean futures are affected by the availability and demand for substitute agricultural commodities, including corn and wheat. The price of soybean futures contracts is also influenced by global economic conditions, including the demand for exports to other countries. Such factors will impact the performance of the Fund and the results of operations on an ongoing basis. The Sponsor cannot predict the impact of such factors.
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Teucrium Sugar Fund
The Teucrium Sugar Fund commenced investment operations on September 19, 2011. The investment objective of the Fund is to have the daily changes in percentage terms of the Shares’ Net Asset Value (“NAV”) reflect the daily changes in percentage terms of a weighted average of the closing settlement prices for three futures contracts for sugar (“Sugar Futures Contracts”) that are traded on ICE Futures US (“ICE Futures”), specifically: (1) the second to expire Sugar No. 11 Futures Contract (a “Sugar No. 11 Futures Contract”), weighted 35%, (2) the third to expire Sugar No. 11 Futures Contract, weighted 30%, and (3) the Sugar No. 11 Futures Contract expiring in the March following the expiration month of the third to expire contract, weighted 35%.
On June 30, 2019, the Fund had 1,400,004 shares outstanding and net assets of $9,934,774. This is in comparison to 1,950,004 shares outstanding and net assets of $14,851,592 on June 30, 2018 and 1,350,004 shares outstanding with net assets of $9,848,806 on March 31, 2019. Shares outstanding decreased by 550,000 or 28% for the period ended June 30, 2019 when compared to June 30, 2018 and increased by 50,000 or 4% for the period ended June 30, 2019 when compared to March 31, 2019. This decrease was, in the opinion of management, due to the low price of sugar and record world demand relative to recent years, which focused investor interest.
Total net assets for the Fund were $9,934,774 on June 30, 2019 compared to $14,851,592 on June 30, 2018 and $9,848,806 on March 31, 2019. The Net Asset Values (“NAV”) per share related to these balances were $7.10, $7.62 and $7.30, respectively. This represents a decrease in total net assets for the year over year of 33%, driven by a combination of a decrease in total shares outstanding of 28% and a decrease in the NAV per share of ($0.52) or 7%. When comparing June 30, 2019 with March 31, 2019, there was an increase in total net assets of 1%, driven by a combination of an increase in total shares outstanding of 4% and a decrease in the NAV per share of ($0.20) or 3%. The closing prices per share for June 30, 2019 and 2018 and March 31, 2019, as reported by the NYSE Arca, were $7.09, $7.58 and $7.28, respectively. The change from June 30, 2019 over the same period last year was a 6% decrease, and a 3% decrease from March 31, 2019.
The graph below shows the actual shares outstanding, total net assets (or AUM) and net asset value per share (NAV per share) for the Fund from inception to June 30, 2019 and serves to illustrate the relative changes of these components.
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The total loss for the three-month period ended June 30, 2019 was ($271,558) resulting primarily from the net change in realized loss on commodity futures contracts totaling ($68,701) and by a net change in unrealized depreciation of commodity futures contracts of ($269,125). Total loss was ($689,717) in the same period of 2018. The total income for the six-month period ended June 30, 2019 was $216,466 resulting primarily from the net change in realized gain on commodity futures contracts totaling $292,667 and by a net change in unrealized depreciation of commodity futures contracts of ($209,093). Total loss was ($1,817,650) in the same period of 2018. Realized gain or loss on trading of commodity futures contracts is a function of: 1) the change in the price of the particular contracts sold as part of a “roll” in contracts as the nearest to expire contracts are exchanged for the appropriate contact given the investment objective of the fund, 2) the change in the price of particular contracts sold in relation to redemption of shares, 3) the gain or loss associated with rebalancing trades which are made to ensure conformance to the benchmark and 4) the number of contracts held and then sold for either circumstance aforementioned. Unrealized gain or loss on trading of commodity futures contracts is a function of the change in the price of contracts held on the final date of the period versus the purchase price for each contract and the number of contracts held in each contract month. The Sponsor has a static benchmark as described above and trades futures contracts to adhere to that benchmark and to adjust for the creation or redemption of shares.
Interest income and other income for three-month period ended June 30, 2019 and 2018, respectively, was $66,268 and $60,762. Interest income and other income for six-month period ended June 30, 2019 and 2018, respectively, was $132,892 and $88,679.This increase year-over-year was partially the result of the Sponsor investing, at times, a portion of the available cash for the Fund in alternative demand deposit savings accounts with more attractive overnight deposit rates. This increase year over year was the result of the Sponsor investing, at times, a portion of the available cash for the Fund in alternative demand deposit savings accounts with more attractive overnight deposit rates. The Fund also invests in investment grade commercial paper with maturities of ninety days or less, these investments provide a higher rate than money market products offered in the past. Effective February 1, 2019, the Fund began investing a portion of the cash held at the broker for initial margin in short-term U.S. Treasury Securities. Interest rates paid on cash balances of the Fund have increased beginning March 2017 and have continued to increase through June 2019. These higher levels of interest rates are projected to decline in 2019.
Total expenses gross of expenses waived by the Sponsor and reimbursement to the Sponsor for previously waived expenses (“Total expenses”) for the three-month period ended June 30, 2019 were $151,926 and for the same period in 2018 were $182,157. This represents a ($30,231) or 17% decrease for 2019 over 2018. The decrease for 2019 was driven by decreases in: 1) a ($5,874) or 19% decrease in the management fee paid to the Sponsor due to lower average net assets; 2) a ($24,018) or 44% decrease in professional fees related to auditing, legal and tax preparation fees; 3) a ($3,987) or 6% decrease in distribution and marketing fees; 4) a ($254) or 2% decrease in custodian fees and expenses; 5) a ($2,936) or 66% decrease in brokerage commissions due to an decrease in contracts purchased and rolled; and 5) a ($2,688) or 82% decrease in other expenses. The decrease was partially offset by increases in 1) a $1,150 or 35% increase in business permits and licenses and; 2) a $8,376 or 110% increase in general and administrative expenses. The decrease over the prior year are generally due to lower average net assets relative to the other Funds. The total expense ratio gross of expenses waived by the Sponsor for these periods was 5.97% in 2019 and 5.81% in 2018. The management fee is calculated at an annual rate of 1% of the Fund’s daily average net assets.
Total expenses gross of expenses waived by the Sponsor and reimbursement to the Sponsor for previously waived expenses (“Total expenses”) for the six-month period ended June 30, 2019 were $286,964 and for the same period in 2018 were $324,132. This represents a $37,168 or 11% decrease for 2019 over 2018. The decrease for 2019 was driven by decreases in: 1) a ($4,071) or 5% decrease in professional fees related to auditing, legal and tax preparation fees; 2) a ($23,589) or 18% decrease in distribution and marketing fees; 3) a ($2,219) or a 12% decrease in custodian fees and expenses; 4) a ($10,655) or 55% decrease in business permits and licenses; 5) a ($3,162) or 48% decrease in brokerage commissions due to an decrease in contracts purchased and rolled; and 6) a ($4,777) or 75% decrease in other expenses. The decrease was partially offset by increases in 1) a $2,749 or 6% increase in the management fee paid to the Sponsor due to higher average net assets; and 2) a $8,556 or 73% increase in general and administrative expenses. The decrease over the prior year are generally due to lower average net assets relative to the other Funds. The total expense ratio gross of expenses waived by the Sponsor for these periods was 5.56% in 2019 and 6.64% in 2018. The management fee is calculated at an annual rate of 1% of the Fund’s daily average net assets.
The Sponsor has the ability to elect to pay certain expenses on behalf of the Fund or waive the management fee. This election is subject to change by the Sponsor, at its discretion. For the three-month period ended June 30, 2019 and 2018, the Sponsor waived fees of $57,954 and $66,209, respectively. For the six-month period ended June 30, 2019 and 2018, the Sponsor waived fees of $99,436 and $146,899, respectively. The Sponsor has determined that no reimbursement will be sought in future periods for those expenses which have been waived for the period.
Total expenses net of expenses waived by the Sponsor (“Total expenses, net”) for the three-month period ended June 30, 2019 and 2018 were $93,972 and $115,948, respectively. The total expense ratio net of expenses waived by the Sponsor for the three-month periods was 3.69% in 2019 and 3.70% in 2018. Net investment loss, which includes the impact of expenses and interest income, was 1.09% in 2019 and 1.76% in 2018.
Total expenses net of expenses waived by the Sponsor (“Total expenses, net”) for the six-month period ended June 30, 2019 and 2018 were $187,528 and $177,233, respectively. The total expense ratio net of expenses waived by the Sponsor for the six-month periods was 3.63% in 2019 and 3.63% in 2018. Net investment loss, which includes the impact of expenses and interest income, was 1.05% in 2019 and 1.81% in 2018.
Other than the management fee to the Sponsor and the brokerage commissions, most of the expenses incurred by the Fund are associated with the day-to-day operation of the Fund and the necessary functions related to regulatory compliance. These are generally based on contracts, which extend for some period of time and up to one year, or commitments regardless of the level of assets under management. The structure of the Fundand the nature of the expenses are such that as total net assets grow, there is a scalability of expenses that may allow the total expense ratio to be reduced. However, if total net assets for the Fund fall, the total expense ratio of the Fund will increase unless additional reductions are made by the Sponsor to the daily expense accrual. The Sponsor can elect to adjust the daily expense accruals at its discretion based on market conditions and other Fund considerations.
Teucrium Wheat Fund
The Teucrium Wheat Fund commenced investment operations on September 19, 2011. The investment objective of the Fund is to have the daily changes in percentage terms of the Shares’ Net Asset Value reflect the daily changes in percentage terms of a weighted average of the closing settlement prices for three futures contracts for wheat (“Wheat Futures Contracts”) that are traded on the Chicago Board of Trade (“CBOT”), specifically: (1) the second to expire CBOT Wheat Futures Contract, weighted 35%, (2) the third to expire CBOT Wheat Futures Contract, weighted 30%, and (3) the CBOT Wheat Futures Contract expiring in the December following the expiration month of the third to expire contract, weighted 35%.
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On June 30, 2019, the Fund had 10,200,004 shares outstanding and net assets of $58,699,891. This is in comparison to 10,450,004 shares outstanding and net assets of $66,566,470 on June 30, 2018 and 10,575,004 shares outstanding with net assets of $55,999,060 on March 31, 2019. Shares outstanding decreased by 250,000 or 2% for the period ended June 30, 2019 when compared to June 30, 2018 and decreased by 375,000 or 4% for the period ended June 30, 2019 when compared to March 31, 2019. This decrease year over year was, in the opinion of management, due to the larger projected U.S. supply, reduced domestic use and higher ending stocks.
Total net assets for the Fund were $58,699,891 on June 30, 2019 compared to $66,566,470 on June 30, 2018 and $55,999,060 on March 31, 2019. The Net Asset Values (“NAV”) per share related to these balances were $5.75, $6.37 and $5.30, respectively. This represents a decrease in total net assets for the year over year of 12% which was driven by a combination of a decrease in total shares outstanding of 2% and a change in the NAV per share which decreased by ($0.62) or 10%. When comparing June 30, 2019 with March 31, 2019, there was an increase in total net assets of 5%, driven by a combination of a decrease in total shares outstanding of 4% and a change in the NAV per share which increased by $0.45 or 8%. The closing prices per share for June 30, 2019 and 2018 and March 31, 2019, as reported by the NYSE Arca, were $5.73, $6.38 and $5.29, respectively. The change from June 30, 2019 over the same period last year was an 10% decrease, and an 8% increase from March 31, 2019.
The graph below shows the actual shares outstanding, total net assets (or AUM) and net asset value per share (NAV per share) for the Fund from inception to June 30, 2019 and serves to illustrate the relative changes of these components.
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The total income for the three-month period ended June 30, 2019 was $5,372,766 resulting primarily from the net change in realized loss on commodity futures contracts totaling ($4,271,888) and by a net change in unrealized appreciation of commodity futures contracts of $9,268,062. Total income was $2,560,956 in the same period of 2018. The total loss for the six-month period ended June 30, 2019 was ($467,016) resulting primarily from the net change in realized loss on commodity futures contracts totaling ($8,367,250) and by a net change in unrealized appreciation of commodity futures contracts of $7,151,175. Total income was $5,257,184 in the same period of 2018. Realized gain or loss on trading of commodity futures contracts is a function of: 1) the change in the price of the particular contracts sold as part of a “roll” in contracts as the nearest to expire contracts are exchanged for the appropriate contact given the investment objective of the fund, 2) the change in the price of particular contracts sold in relation to redemption of shares, 3) the gain or loss associated with rebalancing trades which are made to ensure conformance to the benchmark and 4) the number of contracts held and then sold for either circumstance aforementioned. Unrealized gain or loss on trading of commodity futures contracts is a function of the change in the price of contracts held on the final date of the period versus the purchase price for each contract and the number of contracts held in each contract month. The Sponsor has a static benchmark as described above and trades futures contracts to adhere to that benchmark and to adjust for the creation or redemption of shares.
Interest income and other income for three-month period ended June 30, 2019 and 2018, respectively, was $376,592 and $343,981. Interest income and other income for six-month period ended June 30, 2019 and 2018, respectively, was $749,059 and $619,384. This increase year over year was partially the result of the Sponsor investing, at times, a portion of the available cash for the Fund in alternative demand deposit savings accounts with more attractive overnight deposit rates. The Fund also invests in investment grade commercial paper with maturities of ninety days or less, these investments provide a higher rate than money marketproducts offered in the past. Effective February 1, 2019, the Fund began investing a portion of the cash held at the broker for initial margin in short-term U.S. Treasury Securities. Interest rates paid on cash balances of the Fund have increased beginning March 2017 and have continued to increase through June 2019. These higher levels of interest rates are projected to decline in 2019.
Total expenses gross of expenses waived by the Sponsor and reimbursement to the Sponsor for previously waived expenses (“Total expenses”) for the three-month period ended June 30, 2019 were $544,200 and for the same period in 2018 were $772,566. This represents a ($228,366) or 30% decrease year over year. The decrease for 2019 over 2018 was driven by decreases in all expense categories specifically: 1) a ($28,853) or 17% decrease in management fee paid to the Sponsor due to lower average net assets; 2) a ($41,841) or 27% decrease in professional fees related to auditing, legal and tax preparation fees; 3) a ($90,196) or 29% decrease in distribution and marketing fees; 4) a ($22,094) or 44% decrease in custodian fees and expenses; 5) a ($13) or 0% decrease in business permits and licenses; 6) a ($18,712) or 47% decrease general and administrative expenses; 7) a ($13,875) or 77% decrease in brokerage commissions due to a decrease in contracts purchased and rolled; and 8) a ($12,782) or 82% decrease in other expenses. The total expense ratio gross of expenses waived by the Sponsor for these periods was 3.85% in 2019 and 4.54% in 2018. The management fee is calculated at an annual rate of 1% of the Fund’s daily average net assets.
Total expenses gross of expenses waived by the Sponsor and reimbursement to the Sponsor for previously waived expenses (“Total expenses”) for the six-month period ended June 30, 2019 were $1,039,466 and for the same period in 2018 were $1,428,694. This represents a ($389,228) or 27% decrease year over year. The decrease for 2019 over 2018 was driven by decreases in all expense categories specifically: 1) a ($56,245) or 17% decrease in management fee paid to the Sponsor due to lower average net assets; 2) a ($63,521) or 23% decrease in professional fees related to auditing, legal and tax preparation fees; 3) a ($172,686) or 29% decrease in distribution and marketing fees; 4) a ($31,913) or 38% decrease in custodian fees and expenses; 5) a ($4,077) or 22% decrease in business permits and licenses; 6) a ($17,415) or 28% decrease general and administrative expenses; 7) a ($20,302) or 58% decrease in brokerage commissions due to a decrease in contracts purchased and rolled; and 8) a ($23,069) or 81% decrease in other expenses. The total expense ratio gross of expenses waived by the Sponsor for these periods was 3.73% in 2019 and 4.26% in 2018. The management fee is calculated at an annual rate of 1% of the Fund’s daily average net assets.
The Sponsor has the ability to elect to pay certain expenses on behalf of the Fund or waive the management fee. This election is subject to change by the Sponsor, at its discretion. For the three-month periods ending June 30, 2019 and 2018, the Sponsor waived fees of $0 and $121,015, respectively. For the six-month periods ending June 30, 2019 and 2018, the Sponsor waived fees of $2,500 and $144,784, respectively. The Sponsor has determined that no reimbursement will be sought in future periods for those expenses which have been waived for the period.
Total expenses net of expenses waived by the Sponsor (“Total expenses, net”) for the three-month period ended June 30, 2019 and 2018 were $544,200 and $651,551, respectively. The total expense ratio net of expenses waived by the Sponsor periods was 3.85% in 2019 and 3.83% in 2018. Net investment loss, which includes the impact of expenses and interest income, was 1.18% in 2019 and 1.81% in 2018.
Total expenses net of expenses waived by the Sponsor (“Total expenses, net”) for the six-month period ended June 30, 2019 and 2018 were $1,036,966 and $1,283,910, respectively. The total expense ratio net of expenses waived by the Sponsor periods was 3.72% in 2019 and 3.83% in 2018. Net investment loss, which includes the impact of expenses and interest income, was 1.03% in 2019 and 1.98% in 2018.
Other than the management fee to the Sponsor and the brokerage commissions, most of the expenses incurred by the Fund are associated with the day-to-day operation of the Fund and the necessary functions related to regulatory compliance. These are generally based on contracts, which extend for some period of time and up to one year, or commitments regardless of the level of assets under management. The structure of the Fund and the nature of the expenses are such that as total net assets grow, there is a scalability of expenses that may allow the total expense ratio to be reduced. However, if total net assets for the Fund fall, the total expense ratio of the Fund will increase unless additional reductions are made by the Sponsor to the daily expense accrual. The Sponsor can elect to adjust the daily expense accruals at its discretion based on market conditions and other Fund considerations.
The seasonality patterns for wheat futures prices are impacted by a variety of factors. These include, but are not limited to, the harvest in summer and fall, the planting conditions, and the weather throughout the critical germination and growing periods. Prices for wheat futures are affected by the availability and demand for substitute agricultural commodities, including corn and other feed grains. The price of wheat futures contracts is also influenced by global economic conditions, including the demand for exports to other countries. Such factors will impact the performance of the Fund and the results of operations on an ongoing basis. The Sponsor cannot predict the impact of such factors.
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Teucrium Agricultural Fund
The Teucrium Agricultural Fund commenced operation on March 28, 2012. The investment objective of the Fund is to have the daily changes in percentage terms of the Net Asset Value (“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: the Teucrium Corn Fund (“CORN”), the Teucrium Wheat Fund (“WEAT”), the Teucrium Soybean Fund (“SOYB”) and the Teucrium Sugar Fund (“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, generally on a daily basis, to maintain the approximate 25% allocation to each Underlying Fund. The Fund does not intend to invest directly in futures contracts (“Futures Contracts”), although it reserves the right to do so in the future, including if an Underlying Fund ceases operation.
The investment objective of each Underlying Fund is to have the daily changes in percentage terms of its shares’ 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 in the Underlying Fund’s name. (This weighted average is referred to herein as the Underlying Fund’s “Benchmark,” the Futures Contracts that at any given time make up an Underlying Fund’s Benchmark are referred to herein as the Underlying Fund’s “Benchmark Component Futures Contracts,” and the commodity specified in the Underlying Fund’s name is referred to herein as its “Specified Commodity.”) Specifically, the Teucrium Corn Fund’s Benchmark is: (1) the second-to-expire Futures Contract for corn traded on the Chicago Board of Trade (“CBOT”), weighted 35%, (2) the third-to-expire CBOT corn Futures Contract, weighted 30%, and (3) the CBOT corn Futures Contract expiring in the December following the expiration month of the third to expire contract, weighted 35%. The Teucrium Wheat Fund’s Benchmark is: (1) the second to expire CBOT wheat Futures Contract, weighted 35%, (2) the third to expire CBOT wheat Futures Contract, weighted 30%, and (3) the CBOT wheat Futures Contract expiring in the December following the expiration month of the third to expire contract, weighted 35%. The Teucrium Soybean Fund’s Benchmark is: (1) the second to expire CBOT soybean Futures Contract, weighted 35%, (2) the third to expire CBOT soybean Futures Contract, weighted 30%, and (3) the CBOT soybean Futures Contract expiring in the November following the expiration month of the third-to-expire contract, weighted 35%, except that CBOT soybean Futures Contracts expiring in August and September will not be part of the Teucrium Soybean Fund’s Benchmark because of the less liquid market for these Futures Contracts. The Teucrium Sugar Fund’s Benchmark is: (1) the second to expire Sugar No. 11 Futures Contract traded on ICE Futures US (“ICE Futures”), weighted 35%, (2) the third-to-expire ICE Futures Sugar No. 11 Futures Contract, weighted 30%, and (3) the ICE Futures Sugar No. 11 Futures Contract expiring in the March following the expiration month of the third to expire contract, weighted 35%.
On June 30, 2019, the Fund had 75,002 shares outstanding and net assets of $1,510,362. This is in comparison to 75,002 shares outstanding and net assets of $1,583,335 on June 30, 2018 and 75,002 shares outstanding with net assets of $1,463,487 on March 31, 2019. The Net Asset Values (“NAV”) per share related to these balances were $20.14, $21.11, and $19.51, respectively. This represents a decrease in total net assets for the year over year of 5% which was driven by a decrease in the NAV per share of ($0.97) or 5%. When comparing June 30, 2019 with March 31, 2019, there was an increase in total net assets of 3%, which was driven by an increase in the NAV per share of $0.63 or 3%. The closing prices per share for June 30, 2019 and 2018 and March 31, 2019, as reported by the NYSE Arca, were $20.13, $21.22, and $19.39, respectively. The change from June 30, 2019 over the same period last year was an 5% decrease, and a 4% increase from March 31, 2019.
The graph below shows the actual shares outstanding, total net assets (or AUM) and net asset value per share (NAV per share) for the Fund from inception to June 30, 2019 and serves to illustrate the relative changes of these components.
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Total income for the three-month period ended June 30, 2019 was $47,570 resulting from the realized loss on the securities of the Underlying Funds totaling ($58,112) and a gain generated by the unrealized appreciation on the securities of the Underlying Funds of $105,666. Total loss for the same period in 2018 was ($133,431). Total loss for the six-month period ended June 30, 2019 was ($12,985) resulting from the realized loss on the securities of the Underlying Funds totaling ($65,649) and a gain generated by the unrealized appreciation on the securities of the Underlying Funds of $52,630. Total loss for the same period in 2018 was ($129,987). Realized gain or loss on the securities of the Underlying Funds is a function of 1) the change in the price of particular contracts sold in relation to redemption of shares, and 2) the gain or loss associated with rebalancing trades which are made to ensure conformance to the benchmark. Unrealized gain or loss on the securities of the Underlying Funds is a function of the change in the price of shares held on the final date of the period versus the purchase price for each and the number held. The Sponsor has a static benchmark as described above and trades futures contracts to adhere to that benchmark and to adjust for the creation or redemption of shares.
Total expenses gross of expenses waived by the Sponsor and reimbursement to the Sponsor for previously waived expenses (“Total expenses”) for the three-month period ended June 30, 2019 were $7,876 and for the same period in 2018 were $12,096. This represents a ($4,220) or 35% decrease for 2019 over 2018. The decrease for 2019 was driven by decreases in all expense categories, specifically; 1) a ($3,253) or 57% decrease in professional fees related to auditing, legal and tax preparation fees; 2) a ($543) or 12% decrease in distribution and marketing fees; 3) a ($117) or 18% decrease in custodian fees and expenses; 4) a ($49) or 88% decrease in business permits and licenses fees; 5) a ($85) or 10% decrease in general and administrative and expenses; and 6) a (173) or 95% decrease in other expenses. The total expense ratio gross of expenses waived by the Sponsor were 2.15% in 2019 and 2.99% in 2018.
Total expenses gross of expenses waived by the Sponsor and reimbursement to the Sponsor for previously waived expenses (“Total expenses”) for the six-month period ended June 30, 2019 were $30,178 and for the same period in 2018 were $30,725. This represents a ($547) or 2% decrease for 2019 over 2018. The decrease for 2019 over 2018 was driven by decreases in: 1) a ($1,333) or 20% decrease in professional fees related to auditing, legal and tax preparation fees; 2) a ($49) or 0% decrease in business permits and licenses fees; 3) a ($242) or 17% decrease in general and administrative and expenses; and 4) a (352) or 89% decrease in other expenses. These decreases were partially offset by increases in; 1) a $1,317 or 15% increase in distribution and marketing fees; and 2) a $112 or 9% increase in custodian fees and expenses. The total expense ratio gross of expenses waived by the Sponsor were 4.06% in 2019 and 4.47% in 2018.
The Sponsor has the ability to elect to pay certain expenses on behalf of the Fund or waive the management fee. This election is subject to change by the Sponsor, at its discretion. For the three-month period ended June 30, 2019 and 2018, the Sponsor waived fees of $7,181 and $10,086, respectively. For the six-month period ended June 30, 2019 and 2018, the Sponsor waived fees of $28,765 and $27,301, respectively. The Sponsor has determined that no reimbursement will be sought in future periods for those expenses which have been waived for the period.
Total expenses net of expenses waived by the Sponsor (“Total expenses, net”) for the three-month period ended June 30, 2019 and 2018 were $695 and $2,010, respectively. The total expense ratio net of expenses waived by the Sponsor periods was 0.19% in 2019 and 0.50% in 2018. Net investment loss, which includes the impact of expenses and interest income, was 0.19% in 2019 and 0.50% in 2018.
Total expenses net of expenses waived by the Sponsor (“Total expenses, net”) for the six-month period ended June 30, 2019 and 2018 were $1,413 and $3,424, respectively. The total expense ratio net of expenses waived by the Sponsor periods was 0.19% in 2019 and 0.50% in 2018. Net investment loss, which includes the impact of expenses and interest income, was 0.19% in 2019 and 0.50% in 2018.
Market Outlook
The Corn Market
Corn is currently the most widely produced livestock feed grain in the United States. The two largest demands for the United States’ corn crop are livestock feed and ethanol production. Corn is also processed into food and industrial products, including starch, sweeteners, corn oil, beverages and industrial alcohol. The United States Department of Agriculture (“USDA”) publishes weekly, monthly, quarterly and annual updates for U.S. domestic and worldwide corn production and consumption, and for other grains such as soybeans and wheat which can be used in some cases as a substitute for corn. These reports are available on the USDA’s website, www.usda.gov, at no charge. The outlook provided below is from the July 11, 2019 USDA report.
The United States is the world’s leading producer and exporter of corn. For the Crop Year 2019-20, the United States Department of Agriculture (“USDA”) estimates that the U.S. will produce approximately 32% of all the corn globally, of which about 15% will be exported. For 2019-2020, based on the July 11, 2019 USDA report, global consumption of 1,135 Million Metric Tons (MMT) is expected to be slightly higher than global production of 1,105 MMT. If the global supply of corn exceeds global demand, this may have an adverse impact on the price of corn. Besides the United States, other principal world corn exporters include Argentina, Brazil and the former Soviet Union nations known as the FSU-12 which includes the Ukraine. Major importer nations include Mexico, Japan, the European Union (EU), South Korea, Egypt and parts of Southeast Asia. China’s production at 254 MMT is approximately 9% less than its domestic usage.
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According to the USDA, global corn consumption has increased by 583% from crop year 1960/1961 to 2019/2020 as demonstrated by the graph below and is projected to continue to grow in upcoming years. Consumption growth is the result of a combination of many factors including: 1) global population growth, which, according to the U.S. Census Department, is estimated to increase by approximately 77.3 million people in the 2019-20 time-frame and reach 9.5 billion by 2050; 2) a growing global middle class which is increasing the demand for protein and meat-based products globally and most significantly in developing countries; and 3) increased global use of bio-fuels which is generally driven by government policy. Based on USDA estimates as of July 11, 2019, for each person added to the population, there needs to be an additional 5.9 bushels of corn, 1.7 bushels of soybeans and 3.7 bushels of wheat produced.
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While global consumption of corn has increased over the 1960/1961-2019/2020 period, so has production, driven by increases in acres planted and yield per acre. However, according to the USDA and United Nations, future growth in planted acres and yield may be inhibited by lower-productive land, and lack of infrastructure and transportation. In addition, agricultural crops such as corn are highly weather-dependent for yield and therefore susceptible to changing weather patterns. In addition, given the current production/consumption patterns, nearly 100% of all corn produced globally is consumed which leaves minimal excess inventory if production issues arise.
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The price per bushel of corn in the United States is primarily a function of both U.S. and global production, as well as U.S. and global demand. The graph below shows the USDA published price per bushel by month for the period January 2007 to May 2019.
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On July 11, 2019, the USDA released its monthly World Agricultural Supply and Demand Estimates (WASDE) for the Crop Year 2019-20. The exhibit below provides a summary of historical and current information for United States corn production.
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Standard Corn Futures Contracts trade on the CBOT in units of 5,000 bushels, although 1,000 bushels “mini-corn” Corn Futures Contracts also trade. Three grades of corn are deliverable under CBOT Corn Futures Contracts: Number 1 yellow, which may be delivered at 1.5 cents over the contract price; Number 2 yellow, which may be delivered at the contract price; and Number 3 yellow, between a 2 and 4 cents per bushel under contract price depending on broken corn and foreign material and damage grade factors. There are five months each year in which CBOT Corn Futures Contracts expire: March, May, July, September and December.
If the futures market is in a state of backwardation (i.e., when the price of corn in the future is expected to be less than the current price), the Fund will buy later-to-expire contracts for a lower price than the sooner-to-expire contracts that it sells. Hypothetically, and assuming no changes to either prevailing corn prices or the price relationship between immediate delivery, soon-to-expire contracts and later-to-expire contracts, the value of a contract will rise as it approaches expiration. Over time, if backwardation remained constant, the differenceswould continue to increase. If the futures market is in contango, the Fund will buy later-to-expire contracts for a higher price than the sooner-to-expire contracts that it sells. Hypothetically, and assuming no other changes to either prevailing corn prices or the price relationship between the spot price, soon-to-expire contracts and later-to-expire contracts, the value of a contract will fall as it approaches expiration. Over time, if contango remained constant, the difference would continue to increase. Historically, the corn futures markets have experienced periods of both contango and backwardation. Frequently, whether contango or backwardation exists is a function, among other factors, of the seasonality of the corn market and the corn harvest cycle. All other things being equal, a situation involving prolonged periods of contango may adversely impact the returns of the Fund; conversely a situation involving prolonged periods of backwardation may positively impact the returns of the Fund.
Futures contracts may be either bought or sold long or short. The U.S Commodity Futures Trading Commission weekly releases the “Commitment of Traders” (COT) report, which depicts the open interest as well as long and short positions in the market. Market participants may use this report to gauge market sentiment.
The Soybean Market
Global soybean production is concentrated in the U.S., Brazil, Argentina and China. The United States Department of Agriculture (“USDA”) has estimated that, for the Crop Year 2019-20, the United States will produce approximately 105 MMT of soybeans or approximately 30% of estimated world production, with Brazil production at 123 MMT. Argentina is projected to produce about 53 MMT. For 2019-20, based on the July 11, 2019 USDA report, global consumption of 355 MMT is estimated slightly higher than global production of 347 MMT. If the global supply of soybeans exceeds global demand, this may have an adverse impact on the price of soybeans. The USDA publishes weekly, monthly, quarterly and annual updates for U.S. domestic and worldwide soybean production and consumption. These reports are available on the USDA’s website, www.usda.gov, at no charge. The outlook provided below is from the July 11, 2019 USDA report.
The soybean processing industry converts soybeans into soybean meal, soybean hulls, and soybean oil. Soybean meal and soybean hulls are processed into soy flour or soy protein, which are used, along with other commodities, by livestock producers and the fish farming industry as feed. Soybean oil is sold in multiple grades and is used by the food, petroleum and chemical industries. The food industry uses soybean oil in cooking and salad dressings, baking and frying fats, and butter substitutes, among other uses. In addition, the soybean industry continues to introduce soy-based products as substitutes to various petroleum-based products including lubricants, plastics, ink, crayons and candles. Soybean oil is also converted to biodiesel for use as fuel.
Standard Soybean Futures Contracts trade on the CBOT in units of 5,000 bushels, although 1,000 bushel “mini-sized” Soybean Futures Contracts also trade. Three grades of soybean are deliverable under CBOT Soybean Futures Contracts: Number 1 yellow, which may be delivered at 6 cents per bushel over the contract price; Number 2 yellow, which may be delivered at the contract price; and Number 3 yellow, which may be delivered at 6 cents per bushel under the contract price. There are seven months each year in which CBOT Soybean Futures Contracts expire: January, March, May, July, August, September and November.
If the futures market is in a state of backwardation (i.e., when the price of soybeans in the future is expected to be less than the current price), the Fund will buy later-to-expire contracts for a lower price than the sooner-to-expire contracts that it sells. Hypothetically, and assuming no changes to either prevailing soybean prices or the price relationship between immediate delivery, soon-to-expire contracts and later-to-expire contracts, the value of a contract will rise as it approaches expiration. If the futures market is in contango, the Fund will buy later-to-expire contracts for a higher price than the sooner-to-expire contracts that it sells. Hypothetically, and assuming no other changes to either prevailing soybean prices or the price relationship between the spot price, soon-to-expire contracts and later-to-expire contracts, the value of a contract will fall as it approaches expiration. Historically, the soybeans futures markets have experienced periods of both contango and backwardation. Frequently, whether contango or backwardation exists is a function, among other factors, of the seasonality of the soybean market and the soybean harvest cycle. All other things being equal, a situation involving prolonged periods of contango may adversely impact the returns of the Fund; conversely a situation involving prolonged periods of backwardation may positively impact the returns of the Fund.
Futures contracts may be either bought or sold long or short. The U.S Commodity Futures Trading Commission weekly releases the “Commitment of Traders” (COT) report, which depicts the open interest as well as long and short positions in the market. Market participants may use this report to gauge market sentiment.
The price per bushel of soybeans in the United States is primarily a function of both U.S. and global production, as well as U.S. and global demand. The graph below shows the USDA published price per bushel by month for the period January 2007 to May 2019.
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On July 11, 2019, the USDA released its monthly World Agricultural Supply and Demand Estimates (WASDE) for the Crop Year 2019-20. The exhibit below provides a summary of historical and current information for United States soybean production.
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The Sugar Market
Sugarcane accounts for about 75% of the world’s sugar production, while sugar beets account for the remainder of the world’s sugar production. Sugar manufacturers use sugar beets and sugarcane as the raw material from which refined sugar (sucrose) for industrial and consumer use is produced. Sugar is produced in various forms, including granulated, powdered, liquid, brown, and molasses. The food industry (in particular, producers of baked goods, beverages, cereal, confections, and dairy products) uses sugar and sugarcane molasses to make sugar-containing food products. Sugar beet pulp and molasses products are used as animal feed ingredients. Ethanol is an important by-product of sugarcane processing. Additionally, the material that is left over after sugarcane is processed is used to manufacture paper, cardboard, and “environmentally friendly” eating utensils.
The Sugar No. 11 Futures Contract is the world benchmark contract for raw sugar trading. This contract prices the physical delivery of raw cane sugar, delivered to the receiver’s vessel at a specified port within the country of origin of the sugar. Sugar No. 11 Futures Contracts trade on ICE Futures US and the NYMEX in units of 112,000 pounds.
The United States Department of Agriculture (“USDA”) publishes two major reports annually on U.S. domestic and worldwide sugar production and consumption. These are usually released in November and May. In addition, the USDA publishes periodic, but not as comprehensive, reports on sugar monthly. These reports are available on the USDA’s website, www.usda.gov, at no charge. The USDA’s May 2019 report forecasts global raw sugar production at 181 million metric tons, an increase of 2 million metric tons compared to the 2018/2019 production year. Brazil will be the largest producer of sugar totaling 32 million metric tons; India 30 million metric tons and Europe is expected to produce about 19 million metric tons. Global sugar consumption is forecast to increase for the 25th consecutive year due to increases in Egypt, India, Indonesia and Pakistan. The principal producers of sugar beets, as forecast by the USDA for 2019, include the European Union, the United States, and Russia.
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If the futures market is in a state of backwardation (i.e., when the price of sugar in the future is expected to be less than the current price), the Fund will buy later-to-expire contracts for a lower price than the sooner-to-expire contracts that it sells. Hypothetically, and assuming no changes to either prevailing sugar prices or the price relationship between immediate delivery, soon-to-expire contracts and later-to-expire contracts, the value of a contract will rise as it approaches expiration. If the futures market is in contango, the Fund will buy later-to-expire contracts for a higher price than the sooner-to-expire contracts that it sells. Hypothetically, and assuming no other changes to either prevailing sugar prices or the price relationship between the spot price, soon-to-expire contractsand later-to-expire contracts, the value of a contract will fall as it approaches expiration. Historically, the sugar futures markets have experienced periods of both contango and backwardation. Frequently, whether contango or backwardation exists is a function, among other factors, of the seasonality of the sugar market and the sugar harvest cycle. All other things being equal, a situation involving prolonged periods of contango may adversely impact the returns of the Funds; conversely a situation involving prolonged periods of backwardation may positively impact the returns of the Funds.
Futures contracts may be either bought or sold long or short. The U.S Commodity Futures Trading Commission weekly releases the “Commitment of Traders” (COT) report, which depicts the open interest as well as long and short positions in the market. Market participants may use this report to gauge market sentiment.
The Wheat Market
Wheat is used to produce flour, the key ingredient for breads, pasta, crackers and many other food products, as well as several industrial products such as starches and adhesives. Wheat by-products are used in livestock feeds. Wheat is the principal food grain produced in the United States, and the United States’ output of wheat is typically exceeded only by that of China, the European Union, the former Soviet nations, known as the FSU-12, including the Ukraine, and India. The United States Department of Agriculture (“USDA”) estimates that for 2019-20, the principal global producers of wheat will be the EU, the former Soviet nations known as the FSU-12, China, India, the United States, Australia and Canada. The U.S. generates approximately 7% of the global production, with approximately 49% of that being exported. For 2019-20, based on the July 11, 2019 USDA report, global consumption of 760 MMT is estimated to be slightly lower than production of 771 MMT. If the global supply of wheat exceeds global demand, this may have an adverse impact on the price of wheat. The USDA publishes weekly, monthly, quarterly and annual updates for U.S. domestic and worldwide wheat production and consumption. These reports are available on the USDA’s website, www.usda.gov, at no charge. The outlook provided below is from the July 11, 2019 USDA report.
There are several types of wheat grown in the U.S., which are classified in terms of color, hardness, and growing season. CBOT Wheat Futures Contracts call for delivery of #2 soft red winter wheat, which is generally grown in the eastern third of the United States, but other types and grades of wheat may also be delivered (Grade #1 soft red winter wheat, Hard Red Winter, Dark Northern Spring and Northern Spring wheat may be delivered at 3 cents premium per bushel over the contract price and #2 soft red winter wheat, Hard Red Winter, Dark Northern Spring and Northern Spring wheat may be delivered at the contract price.) Winter wheat is planted in the fall and is harvested in the late spring or early summer of the following year, while spring wheat is planted in the spring and harvested in late summer or fall of the same year. Standard Wheat Futures Contracts trade on the CBOT in units of 5,000 bushels, although 1,000 bushel “mini-wheat” Wheat Futures Contracts also trade. There are five months each year in which CBOT Wheat Futures Contracts expire: March, May, July, September and December.
If the futures market is in a state of backwardation (i.e., when the price of wheat in the future is expected to be less than the current price), the Fund will buy later-to-expire contracts for a lower price than the sooner-to-expire contracts that it sells. Hypothetically, and assuming no changes to either prevailing wheat prices or the price relationship between immediate delivery, soon-to-expire contracts and later-to-expire contracts, the value of a contract will rise as it approaches expiration. If the futures market is in contango, the Fund will buy later-to-expire contracts for a higher price than the sooner-to-expire contracts that it sells. Hypothetically, and assuming no other changes to either prevailing wheat prices or the price relationship between the spot price, soon-to-expire contracts and later-to-expire contracts, the value of a contract will fall as it approaches expiration. Historically, the wheat futures markets have experienced periods of both contango and backwardation. Frequently, whether contango or backwardation exists is a function, among other factors, of the seasonality of the wheat market and the wheat harvest cycle. All other things being equal, a situation involving prolonged periods of contango may adversely impact the returns of the Fund; conversely a situation involving prolonged periods of backwardation may positively impact the returns of the Fund.
Futures contracts may be either bought or sold long or short. The U.S Commodity Futures Trading Commission weekly releases the “Commitment of Traders” (COT) report, which depicts the open interest as well as long and short positions in the market. Market participants may use this report to gauge market sentiment.
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The price per bushel of wheat in the United States is primarily a function of both U.S. and global production, as well as U.S. and global demand. The graph below shows the USDA published price per bushel by month for the period January 2007 to February 2019.
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On July 11, 2019, the USDA released its monthly World Agricultural Supply and Demand Estimates (WASDE) for the Crop Year 2019-20. The exhibit below provides a summary of historical and current information for United States wheat production.
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Calculating the Net Asset Value
The NAV of each Fund is calculated by:
●Taking the current market value of its total assets, and
●Subtracting any liabilities.
The Administrator calculates the NAV of each Fund once each trading day. It calculates NAV as of the earlier of the close of the New York Stock Exchange or 4:00 p.m., New York time. The NAV for a particular trading day will be released after 4:15 p.m., New York time.
In determining the value of the Futures Contracts for each Fund, the Administrator uses the closing price on the exchange on which the commodity is traded, commonly referred to as the settlement price. The time of settlement for each exchange is determined by that exchange and may change from time to time. The current settlement time for each exchange can be found at the appropriate website which are:
1) for the CBOT (CORN, SOYB and WEAT) http://www.cmegroup.com/trading_hours/commodities-hours.html;
2) for ICE (CANE) http://www.theice.com/productguide/Search.shtml?tradingHours=.
The Administrator determines the value of all other investments for each Fund as of the earlier of the close of the New York Stock Exchange or 4:00 p.m., New York time, in accordance with the current Services Agreement between the Administrator and the Trust.
The value of over-the-counter Commodity Interests will be determined based on the value of the commodity or Futures Contract underlying such Commodity Interest, except that a fair value may be determined if the Sponsor believes that a Fund is subject to significant credit risk relating to the counterparty to such Commodity Interest. For purposes of financial statements and reports, the Sponsor will recalculate the NAV of a specific Fund where necessary to reflect the “fair value” of a Futures Contract when the Futures Contract of such Fund closes at its price fluctuation limit for the day. Short-term Treasury Securities held by the Fund are valued by the Administrator using values received from recognized third-party vendors (such as Reuters) and dealer quotes. The NAV includes any unrealized profit or loss on open Commodity Interests and any other credit or debit accruing to each Fund but unpaid or not received by the Fund.
In addition, in order to provide updated information relating to the Funds for use by investors and market professionals, ICE Data Indices, LLC calculates and disseminates throughout the trading day an updated indicative fund value for each Fund. The indicative fund value is calculated by using the prior day’s closing NAV per share of the Fund as a base and updating that value throughout the trading day to reflect changes in the value of the Fund’s Commodity Interests during the trading day. Changes in the value of short-term Treasury Securities and cash equivalents will not be included in the calculation of indicative value throughout the day. For this and other reasons, the indicative fund value disseminated during NYSE Arca trading hours should not be viewed as an actual real time update of the NAV for each Fund. The NAV is calculated only once at the end of each trading day.
The indicative fund value is disseminated on a per Share basis every 15 seconds during regular NYSE Arca trading hours of 9:30 a.m., New York time, to 4:00 p.m., New York time. The CBOT and the ICE are generally open for trading only during specified hours which vary by exchange and may be adjusted by the exchange. However, the futures markets on these exchanges do not currently operate twenty-four hours per day. In addition, there may be some trading hours which may be limited to electronic trading only. This means that there is a gap in time at the beginning and the end of each day during which the Fund’s Shares are traded on the NYSE Arca, when, for example, real-time CBOT trading prices for Corn Futures Contracts traded on such Exchange are not available. As a result, during those gaps there will be no update to the indicative fund values. The most current trading hours for each exchange may be found on the website of that exchange as listed above.
ICE Data Indices, LLC disseminates the indicative fund value through the facilities of CTA/CQ High Speed Lines. In addition, the indicative fund value is published on the NYSE Arca’s website and is available through on-line information services such as Bloomberg and Reuters.
Dissemination of the indicative fund values provides additional information that is not otherwise available to the public and is useful to investors and market professionals in connection with the trading of Shares of the Funds on the NYSE Arca. Investors and market professionals are able throughout the trading day to compare the market price of each Fund and its indicative fund value. If the market price of the Shares of a Fund diverges significantly from the indicative fund value, market professionals may have an incentive to execute arbitrage trades. For example, if the Fund appears to be trading at a discount compared to the indicative fund value, a market professional could buy Fund Shares on the NYSE Arca, aggregate them into Redemption Baskets, and receive the NAV of such Shares by redeeming them to the Trust, provided that there is not a minimum number of shares outstanding for the Fund. Such arbitrage trades can tighten the tracking between the market price of the Fund and the indicative fund value.
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Critical Accounting Policies
The Trust’s critical accounting policies for all the Funds are as follows:

1. | Preparation of the financial statements and related disclosures in conformity with U.S. generally-accepted accounting principles (“GAAP”) requires the application of appropriate accounting rules and guidance, as well as the use of estimates, and requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, revenue and expense and related disclosure of contingent assets and liabilities during the reporting period of the combined financial statements and accompanying notes. The Trust’s application of these policies involves judgments and actual results may differ from the estimates used.

2. | The Sponsor has determined that the valuation of commodity interests that are not traded on a U.S. or internationally recognized futures exchange (such as swaps and other over-the-counter contracts) involves a critical accounting policy. The values which are used by the Funds for futures contracts will be provided by the commodity broker who will use market prices when available, while over-the-counter contracts will be valued based on the present value of estimated future cash flows that would be received from or paid to a third party in settlement of these derivative contracts prior to their delivery date. Values will be determined on a daily basis.

3. | Commodity futures contracts held by the Funds 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 statement 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 statement of operations. Interest on cash equivalents and deposits are recognized on the accrual basis. The Funds earn interest on funds held at the custodian or other financial institutions at prevailing market rates for such investments.

4. | Cash and cash equivalents are cash held at financial institutions in demand-deposit accounts or highly liquid investments with original maturity dates of three months or less at inception. The Funds report cash equivalents in the 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. The Funds have a substantial portion of assets on deposit with banks. Assets deposited with financial institutions may, at times, exceed federally insured limits.

5. | The use of fair value to measure financial instruments, with related unrealized gains or losses recognized in earnings in each period is fundamental to the Trust’s financial statements. In accordance with 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 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: a) 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 securities and financial instruments. Since valuations are based on quoted prices that are readily and regularly available in an active market, valuation of these securities and financial instruments does not entail a significant degree of judgment, b) 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, and c) Level 3 - Valuations based on inputs that are unobservable and significant to the overall fair value measurement. See the notes within the financial statements for further information. The Funds and the Trust record their derivative activities at fair value. Gains and losses from derivative contracts are included in the statement of operations. Derivative contracts include futures contracts related to commodity prices. Futures, which are listed on a national securities exchange, such as the CBOT or 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.

6. | Brokerage commissions on all open commodity futures contracts are accrued on a full-turn basis.

7. | 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 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 counterparties, so the counterparties 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 its 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.

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8. | Due from/to broker for investments in financial instruments are securities transactions pending settlement. The Trust and TAGS 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 counterparties. Since the inception of the Fund, the principal broker through which the Trust and TAGS has the ability to clear securities transactions for TAGS is the Bank of New York Mellon Capital Markets.
9. | The Sponsor is responsible for investing the assets of the Fund in accordance with the objectives and policies of the Fund. The Fund pays 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, 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 Fund also pays its portion of the fees and expenses for services directly attributable to the Fund such as accounting, financial reporting, regulatory compliance and trading activities, which the Sponsor elected not to outsource. Certain aggregate expenses common to all Teucrium Funds within the Trust are allocated by the Sponsor to the respective Funds based on activity drivers deemed most appropriate by the Sponsor for such expenses, including but not limited to relative assets under management and creation 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. 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 Teucrium Funds, which are primarily the cost of performing certain accounting and financial reporting, regulatory compliance, and trading activities that aredirectly attributable to the Fund and are included, primarily, in distribution and marketing fees. 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.

10. | The investment objective of TAGS is to have the daily changes in percentage terms of the Net Asset Value (“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: the Teucrium Corn Fund, the Teucrium Wheat Fund, the Teucrium Soybean Fund and the Teucrium Sugar Fund (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, generally on a daily basis, to maintain the approximate 25% allocation to each Underlying Fund. As such, TAGS will buy, sell and hold as part of its normal operations shares of the four Underlying Funds. The Trust excludes the shares of the other series of the Trust owned by the Teucrium Agricultural Fund from its statements of assets and liabilities. The Trust excludes the net change in unrealized appreciation or depreciation on securities owned by the Teucrium Agricultural Fund from its statements of operations. Upon the sale of the Underlying Funds by the Teucrium Agricultural Fund, the Trust includes any realized gain or loss in its statements of changes in net assets.

11. | For U.S. federal tax purposes, the Funds will be treated as partnerships. Therefore, the Funds do not record a provision for income taxes because the partners 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.

12. | For commercial paper, the Funds use the effective interest method for calculating the actual interest rate in a period based on the amount of a financial instrument's book value at the beginning of the accounting period. Accretion on these investments are recognized using the effective interest method in U.S. dollars and recognized in cash equivalents. All discounts on purchase prices of debt securities are accreted over the life of the respective security.

Credit Risk
When any of the Funds enter into Commodity Interests, it will be exposed to the credit risk that the counterparty will not be able to meet its obligations. For purposes of credit risk, the counterparty for the Futures Contracts traded on the CBOT, NYMEX, and ICE is the clearinghouse associated with those exchanges. In general, clearinghouses are backed by their members who may be required to share in the financial burden resulting from the nonperformance of one of their members, which should significantly reduce credit risk. Some foreign exchanges are not backed by their clearinghouse members but may be backed by a consortium of banks or other financial institutions. Unlike in the case of exchange-traded futures contracts, the counterparty to an over-the-counter Commodity Interest contract is generally a single bank or other financial institution. As a result, there will be greater counterparty credit risk in over-the-counter transactions. There can be no assurance that any counterparty, clearinghouse, or their financial backers will satisfy their obligations to any of the Funds.
The Funds may engage in off exchange transactions broadly called an “exchange for related position” (“EFRP”) transaction. For purposes of the Dodd-Frank Act and related CFTC rules, an EFRP transaction is treated as a “swap.” An “exchange for related position” (“EFRP”) can be used by the Fund as a technique to facilitate the exchanging of a futures hedge position against a creation or redemption order, and thus the Fund or an Underlying Fund may use an EFRP transaction in connection with the creation and redemption of shares. The market specialist/market maker that is the ultimate purchaser or seller of shares in connection with the creation or redemption basket, respectively, agrees to sell or purchase a corresponding offsetting shares or futures position which is then settled on the same business day as a cleared futures transaction by the FCMs. The Fund will become subject to the credit risk of the market specialist/market maker until the EFRP is settled within the business day. The Fund reports all activity related to EFRP transactions under the procedures and guidelines of the CFTC and the exchanges on which the futures are traded.
The Sponsor attempts to manage the credit risk of each Fund by following certain trading limitations and policies. In particular, each Fund intends to post margin and collateral and/or hold liquid assets that will be equal to approximately the face amount of the Interests it holds The Sponsor has implemented procedures that include, but are not limited to, executing and clearing trades and entering into over-the-counter transactions only with parties it deems creditworthy and/or requiring the posting of collateral by such parties for the benefit of the Fund to limit its credit exposure.
The CEA requires all FCMs, such as the Teucrium Funds’ clearing brokers, to meet and maintain specified fitness and financial requirements, to segregate customer funds from proprietary funds and account separately for all customers’ funds and positions, and to maintain specified books and records open to inspection by the staff of the CFTC. The CFTC has similar authority over introducing brokers, or persons who solicit or accept orders for commodity interest trades but who do not accept margin deposits for the execution of trades. The CEA authorizes the CFTC to regulate trading by FCMs and by their officers and directors, permits the CFTC to require action by exchanges in the event of market emergencies, and establishes an administrative procedure under which customers may institute complaints for damages arising from alleged violations of the CEA. The CEA also gives the states powers to enforce its provisions and the regulations of the CFTC.
Currently, ED&F Man Capital Markets Inc. (“ED&F Man”) serves as the Funds’ FCM and the clearing broker to execute and clear the Funds’ futures and provide other brokerage--related services.
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The Funds, other than TAGS, will generally retain cash positions of approximately 95% of total net assets; this balance represents the total net assets less the initial margin requirements held by the FCM. These cash assets are either: 1) deposited by the Sponsor in demand deposit accounts of financial institutions which are deemed by the Sponsor to be of investment level quality, 2) held in a money-market fund which is deemed to be a cash equivalent under the most recent SEC definition, or 3) held in a cash equivalent with a maturity of 90 days or less that is deemed by the Sponsor to be of investment level quality.
Liquidity and Capital Resources
The Funds do not make use of borrowings or other lines of credit to meet their obligations. The Funds meet their liquidity needs in the normal course of business from the proceeds of the sale of their investments or from the cash and/or cash equivalents that they intend to hold at all times. The Funds’ liquidity needs include redeeming Shares, providing margin deposits for existing futures contracts, posting collateral for over-the-counter Commodity Interests, and payment of expenses.
The Funds generate cash primarily from (i) the sale of Creation Baskets and (ii) interest earned on short-term Treasury Securities, cash and cash equivalents. Generally, all of the net assets of the Funds are allocated to trading in Commodity Interests. Most of the assets of the Funds are held in short-term Treasury Securities, cash and/or cash equivalents. The percentage that such assets bear to the total net assets will vary from period to period as the market values of the Commodity Interests change. Interest earned on interest-bearing assets of a Fund are paid to that Fund.
The investments of a Fund in Commodity Interests are subject to periods of illiquidity because of market conditions, regulatory considerations and other reasons. For example, U.S. futures exchanges limit the fluctuations in the prices of certain Futures Contracts during a single day by regulations referred to as “daily limits.” During a single day, no trades may be executed at prices beyond the daily limit. Once the price of such a Futures Contract has increased or decreased by an amount equal to the daily limit, positions in the contracts can neither be taken nor liquidated unless the traders are willing to effect trades at or within the limit. Such market conditions could prevent the Fund from promptly liquidating a position in Futures Contracts.
Market Risk
Trading in Commodity Interests such as Futures Contracts involves the Funds entering into contractual commitments to purchase or sell specific amounts of commodities at a specified date in the future. The gross or face amount of the contracts is expected to significantly exceed the future cash requirements of each Fund as each Fund intends to close out any open positions prior to the contractual expiration date. As a result, each Fund’s market risk is the risk of loss arising from the decline in value of the contracts, not from the need to make delivery under the contracts. The Funds consider the “fair value” of derivative instruments to be the unrealized gain or loss on the contracts. The market risk associated with the commitment by the Funds to purchase a specific commodity will be limited to the aggregate face amount of the contacts held.
The exposure of the Funds to market risk will depend on a number of factors including the markets for the specific commodity, the volatility of interest rates and foreign exchange rates, the liquidity of the commodity-specific Interest markets and the relationships among the contracts held by each Fund.
Regulatory Considerations
The regulation of futures markets, futures contracts, and futures exchanges has historically been comprehensive. The CFTC and the exchanges are authorized to take extraordinary actions in the event of a market emergency including, for example, the retroactive implementation of speculative position limits, increased margin requirements, the establishment of daily price limits and the suspension of trading on an exchange or trading facility.
In addition, considerable regulatory attention has been focused on non-traditional publicly distributed investment pools such as the Funds. Furthermore, various national governments have expressed concern regarding the disruptive effects of speculative trading in certain commodity markets and the need to regulate the derivatives markets in general. The effect of any future regulatory change on the Funds is impossible to predict but could be substantial and adverse.
Pursuant to authority in the CEA, the NFA has been formed and registered with the CFTC as a registered futures association. At the present time, the NFA is the only self-regulatory organization for commodity interest professionals, other than futures exchanges. The CFTC has delegated to the NFA responsibility for the registration of CPOs and FCMs and their respective associated persons. The Sponsor and the Fund’s clearing broker are members of the NFA. As such, they will be subject to NFA standards relating to fair trade practices, financial condition and consumer protection. The NFA also arbitrates disputes between members and their customers and conducts registration and fitness screening of applicants for membership and audits of its existing members. Neither the Trust nor the Funds are required to become a member of the NFA. The regulation of commodity interest transactions in the United States is a rapidly changing area of law and is subject to ongoing modification bygovernmental and judicial action. As noted above, considerable regulatory attention has been focused on non-traditional investment pools that are publicly distributed in the United States. There is a possibility of future regulatory changes within the United States altering, perhaps to a material extent, the nature of an investment in the Funds, or the ability of a Fund to continue to implement its investment strategy.
The CFTC possesses exclusive jurisdiction to regulate the activities of commodity pool operators and commodity trading advisors with respect to “commodity interests,” such as futures and swaps and options, and has adopted regulations with respect to the activities of those persons and/or entities. Under the Commodity Exchange Act (“CEA”), a registered commodity pool operator, such as the Sponsor, is required to make annual filings with the CFTC and the NFA describing its organization, capital structure, management and controlling persons. In addition, the CEA authorizes the CFTC to require and review books and records of, and documents prepared by, registered commodity pool operators. Pursuant to this authority, the CFTC requires commodity pool operators to keep accurate, current and orderly records for each pool that they operate. The CFTC may suspend the registration of a commodity pool operator (1) if the CFTC finds that the operator’s trading practices tend to disrupt orderly market conditions, (2) if any controlling person of the operator is subject to an order of the CFTC denying such person trading privileges on any exchange, and (3) in certain other circumstances. Suspension, restriction or termination of the Sponsor’s registration as a commodity pool operator would prevent it, until that registration were to be reinstated, from managing the Funds, and might result in the termination of a Fund if a successor sponsor is not elected pursuant to the Trust Agreement. Neither the Trust nor the Funds are required to be registered with the CFTC in any capacity.
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The Funds’ investors are afforded prescribed rights for reparations under the CEA. Investors may also be able to maintain a private right of action for violations of the CEA. The CFTC has adopted rules implementing the reparation provisions of the CEA, which provide that any person may file a complaint for a reparations award with the CFTC for violation of the CEA against a floor broker or an FCM, introducing broker, commodity trading advisor, CPO, and their respective associated persons.
The regulations of the CFTC and the NFA prohibit any representation by a person registered with the CFTC or by any member of the NFA, that registration with the CFTC, or membership in the NFA, in any respect indicates that the CFTC or the NFA has approved or endorsed that person or that person’s trading program or objectives. The registrations and memberships of the parties described in this summary must not be considered as constituting any such approval or endorsement. Likewise, no futures exchange has given or will give any similar approval or endorsement.
Trading venues in the United States are subject to varying degrees of regulation under the CEA depending on whether such exchange is a designated contract market (i.e. a futures exchange) or a swap execution facility. Clearing organizations are also subject to the CEA and the rules and regulations adopted thereunder as administered by the CFTC. The CFTC’s function is to implement the CEA’s objectives of preventing price manipulation and excessive speculation and promoting orderly and efficient commodity interest markets. In addition, the various exchanges and clearing organizations themselves as self-regulatory organizations exercise regulatory and supervisory authority over their member firms.
The Dodd-Frank Wall Street Reform and Consumer Protection Act (the “Dodd-Frank Act”) was enacted in response to the economic crisis of 2008 and 2009 and it significantly altered the regulatory regime to which the securities and commodities markets are subject. To date, the CFTC has issued proposed or final versions of almost all of the rules it is required to promulgate under the Dodd-Frank Act, and it continues to issue proposed versions of additional rules that it has authority to promulgate. Provisions of the new law include the requirement that position limits be established on a wide range of commodity interests, including agricultural, energy, and metal-based commodity futures contracts, options on such futures contracts and uncleared swaps that are economically equivalent to such futures contracts and options (“Reference Contracts”). new registration and recordkeeping requirements for swap market participants. capital and margin requirements for “swap dealers” and “major swap participants,” as determined by the new law and applicable regulations. reporting of all swap transactions to swap data repositories. and the mandatory use of clearinghouse mechanisms for sufficiently standardized swap transactions that were historically entered into in the over-the-counter market but are now designated as subject to the clearing requirement. and margin requirements for over-the-counter swaps that are not subject to the clearing requirements.
The Dodd-Frank Act was intended to reduce systemic risks that may have contributed to the 2008/2009 financial crisis. Since the first draft of what became the Dodd-Frank Act, opponents have criticized the broad scope of the legislation and, in particular, the regulations implemented by federal agencies as a result. Since 2010, and most notably in 2015 and 2016, Republicans have proposed comprehensive legislation both in the House and the Senate of the US Congress. These bills are intended to pare back some of the provisions of the Dodd-Frank Act of 2010 that critics view as overly broad, unnecessary to the stability of the U.S. financial system, and inhibiting the growth of the U.S. economy. Furthermore, the administration has issued several executive orders intended to relieve the financial burden created by the Dodd-Frank Act, although these executive orders only set forth several general principles to be followed by the federal agencies and do not mandate the wholesale repeal of the Dodd-Frank Act. The scope of the effect that passage of new financial reform legislation could have on U.S. securities, derivatives and commodities markets is not clear at this time because each federal regulatory agency would have to promulgate new regulations to implement such legislation. Nevertheless, regulatory reform may have a significant impact on U.S.- regulated entities.
Management believes that as of June 30, 2019, it had fulfilled in a timely manner all Dodd-Frank or other regulatory requirements to which it is subject.
The Securities and Exchange Commission made a final ruling on March 29, 2017 to adopt proposed amendments to the Settlement Cycle Rule (Rule 15c6-1(a)) under the Securities Exchange Act of 1934 to shorten the standard settlement cycle for most broker -dealer transactions from three business days after the trade date (T+3) to two business days after the trade date (T+2). The effective date of the adopted amendments was May 30, 2017 with a resulting implementation date of September 5, 2017. The amended rule prohibited broker -dealers from effecting or entering into a contract for the purchase or sale of a security (other than certain exempted securities) that provides for payment of funds and delivery of securities later than the second business day after the date of the contract, unless otherwise expressly agreed to by the parties at the time of the transaction. The products subject to the shortened settlement cycle include equities, corporate bonds, municipal bonds, unit investment trusts, and financial instruments comprised of these security types. Shortening the settlement cycle is expected to yield benefits for the industry and market participants including the further reduction of credit, market, and liquidity risk, and as a result a reduction in systemic risk, for U.S. market participants.
Management successfully completed all steps necessary to implement the rule on September 5, 2017.
Position Limits, Aggregation Limits, Price Fluctuation Limits
On December 16, 2016, the CFTC issued a final rule to amend part 150 of the CFTC’s regulations with respect to the policy for aggregation under the CFTC’s position limits regime for futures and option contracts on nine agricultural commodities (“the Aggregation Requirements”). This final rule addressed the circumstances under which market participants would be required to aggregate all their positions, for purposes of the position limits, of all positions in Reference Contracts of the 9 agricultural commodities held by a single entity and its affiliates, regardless of whether such positions exist on US futures exchanges, non- US futures exchanges, or in over-the-counter swaps. An affiliate of a market participant is defined as two or more persons acting pursuant to an express or implied agreement or understanding. The Aggregation Requirements became effective on February 14, 2017. On August 10, 2017, the CFTC issued aNo- Action Relief Letter No. 17-37 to clarify several provisions under Regulation 150.4, regarding position aggregation filing requirements of market participants. The Sponsor does not anticipate that this order will have an impact on the ability of a Fund to meet its respective investment objectives.
In addition, on December 30, 2016, the CFTC reproposed regulations that would establish revised specific limits on speculative positions in futures contracts, option contracts and swaps on 25 agricultural, energy and metals commodities (the “Proposed Position Limit Rules”).
The Proposed Position Limit Rules were a reproposal and the CFTC has requested comments from the public. It remains to be seen whether the Proposed Position Limit Rules will become effective as the CFTC has proposed, as comments could result in modifications to the proposed limits or implementation could be delayed for other reasons. In general, the Proposed Position Limit Rules do not appear to have a substantial or adverse effect on the Funds. However, if the total net assets of a Fund were to increase significantly from current levels, the Position Limit Rules as proposed could negatively impact the ability of a Fund to meet its respective investment objectives through limits that may inhibit the Sponsor’s ability to sell additional Creation Baskets of the Fund. However, it is not expected that any Fund will reach asset levels that would cause these position limits to be reached in the near future.
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In addition, the Proposed Position Limit Rules state that the CFTC will review, and may amend, the Position Limit Rules at a minimum every two years and more often as deemed necessary. Such future amendments may affect a Fund or Funds, and it may, at that time, be substantial and adverse. By way of example, future amendments, in combination with the Position Limit Rules, may negatively impact the ability of the Fund to meet its respective investment objectives through limits that may inhibit the Sponsor’s ability to sell additional Creation Baskets of the Fund, if the total net assets of a Fund grow significantly from current levels.
The futures exchanges, e.g. the CME, may under the Proposed Position Limit Rules impose position limits which are lower than those imposed by the CFTC. Such a limit by an exchange on which a Fund trades futures contracts may negatively and adversely impact the ability of the Fund to meet its respective investment objectives through limits that may inhibit the Sponsor’s ability to sell additional Creation Baskets of the Fund. No such lower limits by an exchange are currently in place.
The aggregate position limits currently in place under the current position limits and the Aggregation Requirements are as follows for each of the commodities traded by the Funds:

Commodity Future | Spot Month Position Limit | All Month Aggregate Position Limit
corn | 600 contracts | 33,000 contracts
soybeans | 600 contracts | 15,000 contracts
sugar | 5,000 contracts | Only Accountability Limits
wheat | 600 contracts | 12,000 contracts

The aggregate speculative position limits currently as proposed in the Proposed Position Limit Rules are as follows for each of the commodities traded by the Funds:

Commodity Future | Spot Month Position Limit | All Month Aggregate Position Limit
corn | 600 contracts | 62,400 contracts
soybeans | 600 contracts | 31,900 contracts
sugar | 23,300 contracts | 38,400 contracts
wheat | 600 contracts | 32,800 contracts

Accountability levels differ from position limits in that they do not represent a fixed ceiling, but rather a threshold above which a futures exchange may exercise greater scrutiny and control over an investor’s positions. If a Fund were to exceed an applicable accountability level for investments in futures contracts, the exchange will monitor the Fund’s exposure and may ask for further information on its activities, including the total size of all positions, investment and trading strategy, and the extent of liquidity resources of the Fund. If deemed necessary by the exchange, the Fund could be ordered to reduce its aggregate net position back to the accountability level.
In addition to position limits and accountability levels, the exchanges set daily price fluctuation limits on futures contracts. The daily price fluctuation limit establishes the maximum amount that the price of futures contracts may vary either up or down from the previous day’s settlement price. Once the daily price fluctuation limit has been reached in a particular futures contract, no trades may be made at a price beyond that limit.
As of May 1, 2014, the CME replaced the fixed price fluctuation limits with variable price limits for corn, soybeans and wheat. The change, which is now effective and is described in the CME Group Special Executive Report S-7038 and can be accessed at http://www.cmegroup.com/tools-information/lookups/advisories/ser/SER-7038.html.
Off Balance Sheet Financing
As of June 30, 2019, neither the Trust nor any of the Funds has any loan guarantees, credit support or other off-balance sheet arrangements of any kind other than agreements entered into in the normal course of business, which may include indemnification provisions relating to certain risks service providers undertake in performing services which are in the best interests of the Funds. While the exposure of each Fund under these indemnification provisions cannot be estimated, they are not expected to have a material impact on the financial positions of each Fund.
Redemption Basket Obligation
Other than as necessary to meet the investment objective of the Funds and pay the contractual obligations described below, the Funds will require liquidity to redeem Redemption Baskets. Each Fund intends to satisfy this obligation through the transfer of cash of the Fund (generated, if necessary, through the sale of short-term Treasury Securities or other cash equivalents) in an amount proportionate to the number of units being redeemed.
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Contractual Obligations
The primary contractual obligations of each Fund will be with the Sponsor and certain other service providers. Except for TAGS, which has no management fee, the Sponsor, in return for its services, will be entitled to a management fee calculated as a fixed percentage of each Fund’s NAV, currently 1.00% of its average net assets. Each Fund will also be responsible for all ongoing fees, costs and expenses of its operation, including (i) brokerage and other fees and commissions incurred in connection with the trading activities of the Fund; (ii) expenses incurred in connection with registering additional Shares of the Fund or offering Shares of the Fund; (iii) the routine expenses associated with the preparation and, if required, the printing and mailing of monthly, quarterly, annual and other reports required by applicable U.S. federal and state regulatory authorities, Trust meetings and preparing, printing and mailing proxy statements to Shareholders; (iv) the payment of any distributions related to redemption of Shares; (v) payment for routine services of the Trustee, legal counsel and independent accountants; (vi) payment for routine accounting, bookkeeping, custodial and transfer agency services, whether performed by an outside service provider or by affiliates of the Sponsor; (vii) postage and insurance; (viii) costs and expenses associated with client relations and services; (ix) costs of preparation of all federal, state, local and foreign tax returns and any taxes payable on the income, assets or operations of the Fund; and (xi) extraordinary expenses (including, but not limited to, legal claims and liabilities and litigation costs and any indemnification related thereto).
While the Sponsor paid the initial registration fees to the SEC, FINRA and any other regulatory agency in connection with the offer and sale of the Shares offered through each Fund’s prospectus, the legal, printing, accounting and other expenses associated with such registrations, and the initial fee of $5,000 for listing the Shares on the NYSE Arca, each Fund will be responsible for any registration fees and related expenses incurred in connection with any future offer and sale of Shares of the Fund in excess of those offered through its prospectus.
Any general expenses of the Trust will be allocated among the Funds and any other series of the Trust as determined by the Sponsor in its sole and absolute discretion. The Trust is also responsible for extraordinary expenses, including, but not limited to, legal claims and liabilities and litigation costs and any indemnification related thereto. The Trust and/or the Sponsor may be required to indemnify the Trustee, Distributor or Administrator under certain circumstances.
The parties cannot anticipate the amount of payments that will be required under these arrangements for future periods as the NAV and trading levels to meet investment objectives for each Fund will not be known until a future date. These agreements are effective for a specific term agreed upon by the parties with an option to renew, or, in some cases, are in effect for the duration of each Fund’s existence. The parties may terminate these agreements earlier for certain reasons listed in the agreements.
Benchmark Performance
Investing in Commodity Interests subjects the Funds to the risks of the underlying commodity market, and this could result in substantial fluctuations in the price of each Fund’s Shares. Unlike mutual funds, the Funds currently are not expected to distribute dividends to Shareholders. Although this could change if interest rates continue to rise and the assets of the Funds increase. Investors may choose to use the Funds as a means of investing indirectly in the underlying commodity, and there are risks involved in such investments. Investors may choose to use the Funds as vehicles to hedge against the risk of loss, and there are risks involved in hedging activities.
During the period from January 1, 2018 through June 30, 2019 the average daily change in the NAV of each Fund was within plus/minus 10 percent of the average daily change in the Benchmark of each Fund, as stated in the applicable prospectus for each Fund.
Frequency Distribution of Premiums and Discounts: NAV versus the 4pm Bid/Ask Midpoint on the NYSE Arca
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CORN
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The performance data above for the Teucrium Corn Fund represents past performance. Past performance is not a guarantee of future results. Investment return and value of the Fund’s Shares will fluctuate so that an investor’s Shares, when sold, may be worth more or less than their original cost. Performance may be lower or higher than performance data quoted.
SOYB
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The performance data above for the Teucrium Soybean Fund represents past performance. Past performance is not a guarantee of future results. Investment return and value of the Fund’s Shares will fluctuate so that an investor’s Shares, when sold, may be worth more or less than their original cost. Performance may be lower or higher than performance data quoted.
CANE
150
The performance data above for the Teucrium Sugar Fund represents past performance. Past performance is not a guarantee of future results. Investment return and value of the Fund’s Shares will fluctuate so that an investor’s Shares, when sold, may be worth more or less than their original cost. Performance may be lower or higher than performance data quoted.
WEAT
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The performance data above for the Teucrium Wheat Fund represents past performance. Past performance is not a guarantee of future results. Investment return and value of the Fund’s Shares will fluctuate so that an investor’s Shares, when sold, may be worth more or less than their original cost. Performance may be lower or higher than performance data quoted.
TAGS
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The performance data above for the Teucrium Agricultural Fund represents past performance. Past performance is not a guarantee of future results. Investment return and value of the Fund’s Shares will fluctuate so that an investor’s Shares, when sold, may be worth more or less than their original cost. Performance may be lower or higher than performance data quoted.
For the period from August 2, 2012 through April 10, 2018, TAGS had 50,002 shares outstanding; this represents the minimum number of shares and, thus, no shares could be redeemed until additional shares have been created. This has generated a situation, at times, in which the spread between the bid/ask midpoint at 4pm and the NAV falls outside of the “1 to 49” or “-1 to -49” range. The situation does not affect the actual NAV of the Fund. Effective September 4, 2018, the Sponsor has determined to change the number of Shares required for a Creation Basket or Redemption Basket from 25,000 shares of the Fund to 12,500 shares. The Fund as of June 30, 2019 has 75,002 shares outstanding.
Description
The above frequency distribution charts present information about the difference between the daily market price for Shares of each Fund and the Fund’s reported Net Asset Value per share. The amount that a Fund’s market price is above the reported NAV is called the premium. The amount that a Fund’s market price is below the reported NAV is called the discount. The market price is determined using the midpoint between the highest bid and the lowest offer on the listing exchange, as of the time that a Fund’s NAV is calculated (usually 4:00 p.m., New York time). The horizontal axis of the chart shows the premium or discount expressed in basis points. The vertical axis indicates the number of trading days in the period covered by the chart. Each bar in the chart shows the number of trading days in which a Fund traded within the premium/discount range indicated.
*A unit that is equal to 1/100th of 1% and is used to denote the change in a financial instrument.
NEITHER THE PAST PERFORMANCE OF A FUND NOR THE PRIOR INDEX LEVELS AND CHANGES, POSITIVE OR NEGATIVE, SHOULD BE TAKEN AS AN INDICATION OF THE FUND’S FUTURE PERFORMANCE.
Item 3. Quantitative and Qualitative Disclosures About Market Risk
Market Risk
The discussion and analysis which follows may contain trend analysis and other forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934 which reflect our current views with respect to future events and financial results. Words such as “anticipate,” “expect,” “intend,” “plan,” “believe,” “seek,” “outlook” and “estimate,” as well as similar words and phrases, signify forward-looking statements. The Trust’s forward-looking statements are not guarantees of future results and conditions, and important factors, risks and uncertainties may cause our actual results to differ materially from those expressed in our forward-looking statements.
You should not place undue reliance on any forward-looking statements. Except as expressly required by the Federal securities laws, the Sponsor undertakes no obligation to publicly update or revise any forward-looking statements or the risks, uncertainties or other factors described in this Report, as a result of new information, future events or changed circumstances or for any other reason after the date of this Report.
Trading in Commodity Interests such as Futures Contracts will involve the Funds entering into contractual commitments to purchase or sell specific amounts of commodities at a specified date in the future. The gross or face amount of the contracts is expected to significantly exceed the future cash requirements of each Fund as each Fund intends to close out any open positions prior to the contractual expiration date. As a result, each Fund’s market risk is the risk of loss arising from the decline in value of the contracts, not from the need to make delivery under the contracts. The Funds consider the “fair value” of derivative instruments to be the unrealized gain or loss on the contracts. The market risk associated with the commitment by the Funds to purchase a specific commodity will be limited to the aggregate face amount of the contacts held.
The exposure of the Funds to market risk will depend on a number of factors including the markets for the specific commodity, the volatility of interest rates and foreign exchange rates, the liquidity of the commodity-specific Interest markets and the relationships among the contracts held by each Fund.
TAGS is subject to the risks of the commodity-specific futures contracts of the Underlying Funds as the fair value of its holdings is based on the NAV of each of the Underlying Funds, each of which is directly impacted by the factors discussed above.
The tables below present a quantitative analysis of hypothetical impact of price decreases and increases in each of the commodity futures contracts held by each of the Funds, or the Underlying Funds in the case of TAGS, on the actual holdings and NAV per share as of June 30, 2019. For purposes of this analysis, all futures contracts held by the Funds and the Underlying Funds are assumed to change by the same percentage. In addition, the cash held by the Funds and any management fees paid to the Sponsor are assumed to remain constant and not impact the NAV per share. There may be very slight and immaterial differences, due to rounding, in the tables presented below.
153
CORN:

| June 30, 2019 as Reported | 10% Decrease | 15% Decrease | 20% Decrease | 10% Increase | 15% Increase | 20% Increase
Holdings as of June 30, 2019 | Number of Contracts Held | Closing Price | Notional Amount | Notional Amount | Notional Amount | Notional Amount | Notional Amount | Notional Amount | Notional Amount
CBOT Corn Futures SEP19 | 1,561 | $4.2475 | $33,151,738 | $29,836,564 | $28,178,977 | $26,521,390 | $36,466,911 | $38,124,498 | $39,782,085
CBOT Corn Futures DEC19 | 1,318 | $4.3150 | $28,435,850 | $25,592,265 | $24,170,473 | $22,748,680 | $31,279,435 | $32,701,228 | $34,123,020
CBOT Corn Futures DEC20 | 1,675 | $4.1575 | $34,819,062 | $31,337,156 | $29,596,203 | $27,855,250 | $38,300,968 | $40,041,921 | $41,782,874
Total CBOT Corn Futures |  |  | $96,406,650 | $86,765,985 | $81,945,653 | $77,125,320 | $106,047,314 | $110,867,647 | $115,687,979
Shares outstanding |  |  | 5,875,004 | 5,875,004 | 5,875,004 | 5,875,004 | 5,875,004 | 5,875,004 | 5,875,004
Net Asset Value per Share attributable directly to CBOT Corn Futures |  |  | $16.41 | $14.77 | $13.95 | $13.13 | $18.05 | $18.87 | $19.69
Total Net Asset Value per Share as reported |  |  | $16.40 |  |  |  |  |  |
Change in the Net Asset Value per Share |  |  |  | $(1.64) | $(2.46) | $(3.28) | $1.64 | $2.46 | $3.28
Percent Change in the Net Asset Value per Share |  |  |  | -10.00% | -15.01% | -20.01% | 10.00% | 15.01% | 20.01%

SOYB:

| June 30, 2019 as Reported | 10% Decrease | 15% Decrease | 20% Decrease | 10% Increase | 15% Increase | 20% Increase
Holdings as of June 30, 2019 | Number of Contracts Held | Closing Price | Notional Amount | Notional Amount | Notional Amount | Notional Amount | Notional Amount | Notional Amount | Notional Amount
CBOT Soybean Futures NOV19 | 250 | $9.2300 | $11,537,500 | $10,383,750 | $9,806,875 | $9,230,000 | $12,691,250 | $13,268,125 | $13,845,000
CBOT Soybean Futures JAN20 | 212 | $9.3450 | $9,905,700 | $8,915,130 | $8,419,845 | $7,924,560 | $10,896,270 | $11,391,555 | $11,886,840
CBOT Soybean Futures NOV20 | 244 | $9.5150 | $11,608,300 | $10,447,470 | $9,867,055 | $9,286,640 | $12,769,130 | $13,349,545 | $13,929,960
Total CBOT Soybean Futures |  |  | $33,051,500 | $29,746,350 | $28,093,775 | $26,441,200 | $36,356,650 | $38,009,225 | $39,661,800
Shares outstanding |  |  | 2,100,004 | 2,100,004 | 2,100,004 | 2,100,004 | 2,100,004 | 2,100,004 | 2,100,004
Net Asset Value per Share attributable directly to CBOT Soybean Futures |  |  | $15.74 | $14.16 | $13.38 | $12.59 | $17.31 | $18.10 | $18.89
Total Net Asset Value per Share as reported |  |  | $15.72 |  |  |  |  |  |
Change in the Net Asset Value per Share |  |  |  | $(1.57) | $(2.36) | $(3.15) | $1.57 | $2.36 | $3.15
Percent Change in the Net Asset Value per Share |  |  |  | -10.01% | -15.01% | -20.02% | 10.01% | 15.01% | 20.02%

154
CANE:

| June 30, 2019 as Reported |  | 10% Decrease | 15% Decrease | 20% Decrease | 10% Increase | 15% Increase | 20% Increase
Holdings as of June 30, 2019 | Number of Contracts Held | Closing Price | Notional Amount | Notional Amount | Notional Amount | Notional Amount | Notional Amount | Notional Amount | Notional Amount
ICE #11 Sugar Futures MAR20 | 228 | $0.1355 | $3,460,128 | $3,114,115 | $2,941,109 | $2,768,102 | $3,806,141 | $3,979,147 | $4,152,154
ICE #11 Sugar Futures MAY20 | 195 | $0.1363 | $2,976,792 | $2,679,113 | $2,530,273 | $2,381,434 | $3,274,471 | $3,423,311 | $3,572,150
ICE #11 Sugar Futures MAR21 | 219 | $0.1424 | $3,492,787 | $3,143,508 | $2,968,869 | $2,794,230 | $3,842,066 | $4,016,705 | $4,191,345
Total ICE #11 Sugar Futures |  |  | $9,929,707 | $8,936,736 | $8,440,251 | $7,943,766 | $10,922,678 | $11,419,163 | $11,915,649
Shares outstanding |  |  | 1,400,004 | 1,400,004 | 1,400,004 | 1,400,004 | 1,400,004 | 1,400,004 | 1,400,004
Net Asset Value per Share attributable directly to ICE #11 Sugar Futures |  |  | $7.09 | $6.38 | $6.03 | $5.67 | $7.80 | $8.16 | $8.51
Total Net Asset Value per Share as reported |  |  | $7.10 |  |  |  |  |  |
Change in the Net Asset Value per Share |  |  |  | $(0.71) | $(1.06) | $(1.42) | $0.71 | $1.06 | $1.42
Percent Change in the Net Asset Value per Share |  |  |  | -9.99% | -14.99% | -19.99% | 9.99% | 14.99% | 19.99%

WEAT:

| June 30, 2019 as Reported | 10% Decrease | 15% Decrease | 20% Decrease | 10% Increase | 15% Increase | 20% Increase
Holdings as of June 30, 2019 | Number of Contracts Held | Closing Price | Notional Amount | Notional Amount | Notional Amount | Notional Amount | Notional Amount | Notional Amount | Notional Amount
CBOT Wheat Futures SEP19 | 776 | $5.2725 | $20,457,300 | $18,411,570 | $17,388,705 | $16,365,840 | $22,503,030 | $23,525,895 | $24,548,760
CBOT Wheat Futures DEC19 | 653 | $5.3850 | $17,582,025 | $15,823,823 | $14,944,721 | $14,065,620 | $19,340,228 | $20,219,329 | $21,098,430
CBOT Wheat Futures DEC20 | 733 | $5.6350 | $20,652,275 | $18,587,048 | $17,554,434 | $16,521,820 | $22,717,503 | $23,750,116 | $24,782,730
Total CBOT Wheat Futures |  |  | $58,691,600 | $52,822,441 | $49,887,860 | $46,953,280 | $64,560,761 | $67,495,340 | $70,429,920
Shares outstanding |  |  | 10,200,004 | 10,200,004 | 10,200,004 | 10,200,004 | 10,200,004 | 10,200,004 | 10,200,004
Net Asset Value per Share attributable directly to CBOT Wheat Futures |  |  | $5.75 | $5.18 | $4.89 | $4.60 | $6.33 | $6.62 | $6.90
Total Net Asset Value per Share as reported |  |  | $5.75 |  |  |  |  |  |
Change in the Net Asset Value per Share |  |  |  | $(0.58) | $(0.86) | $(1.15) | $0.58 | $0.86 | $1.15
Percent Change in the Net Asset Value per Share |  |  |  | -10.01% | -15.01% | -20.01% | 10.01% | 15.01% | 20.01%

155
TAGS:

| June 30, 2019 as Reported | 10% Decrease | 15% Decrease | 20% Decrease | 10% Increase | 15% Increase | 20% Increase
Holdings as of June 30, 2019 | Number of Shares Held | Closing NAV | Fair Value | Fair Value | Fair Value | Fair Value | Fair Value | Fair Value | Fair Value
Teucrium Corn Fund | 22,658 | $16.4000 | $371,682 | $334,514 | $315,930 | $297,345 | $408,850 | $427,434 | $446,018
Teucrium Soybean Fund | 24,181 | $15.7200 | $380,232 | $342,209 | $323,197 | $304,185 | $418,255 | $437,266 | $456,278
Teucrium Sugar Fund | 53,124 | $7.1000 | $376,978 | $339,281 | $320,432 | $301,583 | $414,676 | $433,525 | $452,374
Teucrium Wheat Fund | 66,037 | $5.7500 | $380,036 | $342,033 | $323,031 | $304,029 | $418,040 | $437,042 | $456,044
Total value of shares of the Underlying Funds |  |  | $1,508,928 | $1,358,037 | $1,282,590 | $1,207,142 | $1,659,821 | $1,735,267 | $1,810,714
Shares outstanding |  |  | 75,002 | 75,002 | 75,002 | 75,002 | 75,002 | 75,002 | 75,002
Net Asset Value per Share attributable directly to shares of the Underlying Funds |  |  | $20.12 | $18.11 | $17.10 | $16.09 | $22.13 | $23.14 | $24.14
Total Net Asset Value per Share as reported |  |  | $20.14 |  |  |  |  |  |
Change in the Net Asset Value per Share |  |  |  | $(2.01) | $(3.02) | $(4.02) | $2.01 | $3.02 | $4.02
Percent Change in the Net Asset Value per Share |  |  |  | -9.99% | -14.98% | -19.98% | 9.99% | 14.98% | 19.98%

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 counterparties, so the counterparties 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.
The Dodd-Frank Act requires the CFTC, the SEC and the Office of the Comptroller of the Currency, the Board of Governors of the Federal Reserve System, the Federal Deposit Insurance Corporation, the Farm Credit System and the Federal Housing Finance Agency (collectively, the “Prudential Regulators”) to establish “both initial and variation margin requirements on all swaps that are not cleared by a registered clearing organization” (i.e., uncleared or over-the-counter swaps). The proposed rules would require swap dealers and major swap participants to collect both variation and initial margin from counterparties known as “financial end-users” such as the Funds or Underlying Funds and in certain circumstances require these swap dealers or major swap participants to post variation margin or initial margin to the Funds or Underlying Funds. The CFTC and the Prudential Regulators finalized these rules in 2016 and compliance became necessary in September 2016.
156
An “exchange for related position” (“EFRP”) can be used by the Fund as a technique to facilitate the exchanging of a futures hedge position against a creation or redemption order, and thus the Fund may use an EFRP transaction in connection with the creation and redemption of shares. The market specialist/market maker that is the ultimate purchaser or seller of shares in connection with the creation or redemption basket, respectively, agrees to sell or purchase a corresponding offsetting futures position which is then settled on the same business day as a cleared futures transaction by the FCMs. The Fund will become subject to the credit risk of the market specialist/market maker until the EFRP is settled within the business day, which is typically 7 hours or less. The Fund reports all activity related to EFRP transactions under the procedures and guidelines of the CFTC and the exchanges on which the futures are traded.
The Funds, other than TAGS, will generally retain cash positions of approximately 95% of total net assets; this balance represents the total net assets less the initial margin requirements discussed above. These cash assets are either: 1) deposited by the Sponsor in demand deposit accounts of financial institutions which are rated in the highest short-term rating category by a nationally recognized statistical rating organization or deemed by the Sponsor to be of comparable quality; 2) held in short-term Treasury Securities; 3) held in a money-market fund which is deemed to be a cash equivalent under the most recent SEC definition; or 4) held in commercial paper with maturities of 90 days or less.
Item 4. Controls and Procedures
Disclosure Controls and Procedures
The Trust and each Fund maintains disclosure controls and procedures that are designed to ensure that information required to be disclosed in the Trust’s periodic reports filed or submitted under the Securities Exchange Act of 1934, as amended (the “Exchange Act”) is recorded, processed, summarized and reported within the time period specified in the SEC’s rules and forms for the Trust and each Fund thereof.
Management of the Sponsor of the Funds (“Management”), including Sal Gilbertie, the Sponsor’s Principal Executive Officer and Cory Mullen-Rusin, the Sponsor’s Principal Financial Officer, who perform functions equivalent to those of a principal executive officer and principal financial officer of the Trust if the Trust had any officers, have evaluated the effectiveness of the design and operation of the Trust’s and each Fund’s disclosure controls and procedures (as defined in Rule 13a-15(e) or 15d-15(e) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) as of the end of the period covered by this report, and, based upon that evaluation, concluded that the Trust’s and each Fund’s disclosure controls and procedures were effective as of the end of such period, to ensure that information the Trust is required to disclose in the reports that it files or submits with the SEC under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the SEC’s rules and forms, and to ensure that information required to be disclosed by the Trust in the reports that it files or submits under the Exchange Act is accumulated and communicated to management of the Sponsor, as appropriate, to allow timely decisions regarding required disclosure. The scope of the evaluation of the effectiveness of the design and operation of its disclosure controls and procedures covers the Trust, as well as separately for each Fund that is a series of the Trust.
The certifications of the Chief Executive Officer and Chief Financial Officer are applicable to each Fund individually as well as the Trust as a whole.
Changes in Internal Control over Financial Reporting
There has been no change in the Trust’s or the Funds’ internal controls over the financial reporting (as defined in the Rules 13a-15(f) and 15d-15(f) of the Exchange Act) that occurred during the Trust’s last fiscal quarter that has materially affected, or is reasonably likely to materially affect, the Trust’s or the Funds’ internal control over financial reporting.
157
PART II. OTHER INFORMATION
Item 1. Legal Proceedings.
Although each of the Funds may, from time to time, be involved in litigation arising out of its operations in the normal course of business or otherwise, none of the Funds is currently a party to any pending material legal proceedings.
Item 1A. Risk Factors
There have been no material changes to the risk factors previously disclosed in the Trust’s Annual Report on Form 10-K for the fiscal year ended December 31, 2018, filed on March 15, 2019.
The commodity interests in which each of the Funds invests, and in which TAGS invests indirectly through the Shares of the Underlying Funds, are referred to as Commodity Interests and for each Fund individually as the specific commodity interests, e.g. Corn Interests.
Risks Applicable to all Funds
There are Risks Related to Fund Structure and Operations of the Funds
Unlike mutual funds, commodity pools and other investment pools that manage their investments so as to realize income and gains for distribution to their investors, a Fund generally does not distribute dividends to Shareholders. You should not invest in a Fund if you will need cash distributions from the Fund to pay taxes on your share of income and gains of the Fund, if any, or for other purposes.
The Sponsor has consulted with legal counsel, accountants and other advisers regarding the formation and operation of the Trust and the Funds. No counsel has been appointed to represent you in connection with the offering of Shares. Accordingly, you should consult with your own legal, tax and financial advisers regarding the desirability of an investment in the Shares.
The Sponsor intends to re-invest any income and realized gains of a Fund in additional Commodity Interests, or Shares of the Underlying Funds in the case of TAGS, rather than distributing cash to Shareholders. Although a Fund does not intend to make cash distributions, the income earned from its investments held directly or posted as margin may reach levels that merit distribution, e.g., at levels where such income is not necessary to support its underlying investments in Commodity Interests, corn for example, and where investors adversely react to being taxed on such income without receiving distributions that could be used to pay such tax. Cash distributions may be made in these and similar instances.
A Fund must 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, the Financial Industry Regulatory Authority (“FINRA”), 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. Each Fund also pays the fees and expenses associated with the Trust’s tax accounting and reporting requirements. Each Fund, excluding TAGS, is also contractually obligated to pay a management fee to the Sponsor. Such fees may be waived by the Sponsor at its discretion. Accordingly, each Fund must have sufficient total net assets to be able realize in actuality the total expense ratio filed in regulatory filings.
A Fund may terminate at any time, regardless of whether the Fund has incurred losses, subject to the terms of the Trust Agreement. For example, the dissolution or resignation of the Sponsor would cause the Trust to terminate unless shareholders holding a majority of the outstanding shares of the Trust elect within 90 days of the event to continue the Trust and appoint a successor Sponsor. In addition, the Sponsor may terminate a Fund 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. The Fund’s termination would result in the liquidation of its investments and the distribution of its remaining assets to the Shareholders on a pro rata basis in accordance with their Shares, and the Fund could incur losses in liquidating its investments in connection with a termination. Termination could also negatively affect the overall maturity and timing of your investment portfolio. Any expenses related to the operation of a Fund would need to be paid by the Fund at the time of termination.
To the extent that investors use a Fund as a means of investing indirectly in a specific Commodity Interest, there is the risk that the changes in the price of the Fund’s Shares on the NYSE Arca will not closely track the changes in spot price of that Commodity Interest. This could happen if the price of Shares traded on the NYSE Arca does not correlate with the Fund’s NAV, if the changes in the Fund’s NAV do not correlate with changes in the Benchmark, or if the changes in the Benchmark do not correlate with changes in the cash or spot price of the specific Commodity Interest. This is a risk because if these correlations are not sufficiently close, then investors may not be able to use the Fund as a cost-effective way to invest indirectly in the specific Commodity Interest, or the underlying specific Commodity Interest in the case of TAGS, or as a hedge against the risk of loss in commodity-related transactions.
158
Only an Authorized Purchaser may engage in creation or redemption transactions directly with the Funds. The Funds have a limited number of institutions that act as Authorized Purchasers. To the extent that these institutions exit the business or are unable to proceed with creation and/or redemption orders with respect to the Funds and no other Authorized Purchaser is able to step forward to create or redeem Creation Units, Fund shares may trade at a discount to NAV and possibly face trading halts and/or delisting. In addition, a decision by a market maker or lead market maker to step away from activities for a Fund, particularly in times of market stress, could adversely affect liquidity, the spread between the bid and ask quotes for the Fund’s Shares, and potentially the price of the Shares. The Sponsor can make no guarantees that participation by Authorized Purchasers or market makers will continue.
An investment in a Fund faces numerous risks from its shares being traded in the secondary market, any of which may lead to the Fund’s shares trading at a premium or discount to NAV. Although Fund shares are listed for trading on the NYSE Arca, there can be no assurance that an active trading market for such shares will develop or be maintained. Trading in Fund shares may be halted due to market conditions or for reasons that, in the view of the NYSE Arca, make trading in shares inadvisable. There can be no assurance that the requirements of the NYSE Arca necessary to maintain the listing of any Fund will continue to be met or will remain unchanged or that the shares will trade with any volume, or at all. The NAV of each Fund’s shares will generally fluctuate with changes in the market value of the Fund’s portfolio holdings. The market prices of shares will generally fluctuate in accordance with changes in the Fund’s NAV and supply and demand of shares on the NYSE Arca. It cannot be predicted whether a Fund's shares will trade below, at or above their NAV. Investors buying or selling Fund shares in the secondary market will pay brokerage commissions or other charges imposed by brokers as determined by that broker. Brokerage commissions are often a fixed amount and may be a significant proportional cost for investors seeking to buy or sell relatively small amounts of shares. Trading volume of the shares of each Fund could be affected by investors who trade significant quantities of shares on any given business day. Such investors may or may not file all SEC filings as required. In addition, if interest rates realized on cash balances were to decline, there is a risk that the net investment ratio of the Funds may increase from the current level.
Neither the Trust, nor any of the Funds, is an investment company subject to the Investment Company Act of 1940. Accordingly, you do not have the protections afforded by that statute, which, for example, requires investment companies to have a board of directors with a majority of disinterested directors and regulates the relationship between the investment company and its investment manager.
The arrangements between clearing brokers and counterparties on the one hand and the Funds on the other generally are terminable by the clearing brokers or counterparty upon notice to the Funds. In addition, the agreements between the Funds and their third-party service providers, such as the Distributor and the Custodian, are generally terminable at specified intervals. Upon termination, the Sponsor may be required to renegotiate or make other arrangements for obtaining similar services if the Funds intend to continue to operate. Comparable services from another party may not be available, or even if available, these services may not be available on the terms as favorable as those of the expired or terminated arrangements.
The Sponsor does not employ trading advisors for the Funds; however, it reserves the right to employ them in the future. The only advisor to the Funds is the Sponsor. A lack of independent trading advisors may be disadvantageous to the Funds because they will not receive the benefit of their independent expertise.
The Sponsor’s trading strategy is quantitative in nature, and it is possible that the Sponsor will make errors in its implementation. The execution of the quantitative strategy is subject to human error, such as incorrect inputs into the Sponsor’s computer systems and incorrect information provided to the Funds’ clearing brokers. In addition, it is possible that a computer or software program may malfunction and cause an error in computation. Any failure, inaccuracy or delay in executing the Funds’ transactions could affect its ability to achieve its investment objective. It could also result in decisions to undertake transactions based on inaccurate or incomplete information. This could cause substantial losses on transactions. The Sponsor is not required to reimburse a Fund for any costs associated with an error in the placement or execution of a trade in commodity futures interests or shares of the Underlying Funds.
The Funds’ trading activities depend on the integrity and performance of the computer and communications systems supporting them. Extraordinary transaction volume, hardware or software failure, power or telecommunications failure, a natural disaster or other catastrophe could cause the computer systems to operate at an unacceptably slow speed or even fail. Any significant degradation or failure of the systems that the Sponsor uses to gather and analyze information, enter orders, process data, monitor risk levels and otherwise engage in trading activities may result in substantial losses on transactions, liability to other parties, lost profit opportunities, damages to the Sponsor’s and Funds’ reputations, increased operational expenses and diversion of technical resources.
The development of complex computer and communications systems and new technologies may render the existing computer and communications systems supporting the Funds’ trading activities obsolete. In addition, these computer and communications systems must be compatible with those of third parties, such as the systems of exchanges, clearing brokers and the executing brokers. As a result, if these third parties upgrade their systems, the Sponsor will need to make corresponding upgrades to continue effectively its trading activities. The Funds’ future success may depend on the Funds’ ability to respond to changing technologies on a timely and cost-effective basis.
The Funds depend on the proper and timely function of complex computer and communications systems maintained and operated by the futures exchanges, brokers and other data providers that the Sponsor uses to conduct trading activities. Failure or inadequate performance of any of these systems could adversely affect the Sponsor’s ability to complete transactions, including its ability to close out positions, and result in lost profit opportunities and significant losses on commodity interest transactions. This could have a material adverse effect on revenues and materially reduce the Funds’ available capital. For example, unavailability of price quotations from third parties may make it difficult or impossible for the Sponsor to conduct trading activities so that each Fund will closely track its Benchmark. Unavailability of records from brokerage firms may make it difficult or impossible for the Sponsor to accurately determine which transactions have been executed or the details, including price and time, of any transaction executed. This unavailability of information also may make it difficult or impossible for the Sponsor to reconcile its records of transactions with those of another party or to accomplish settlement of executed transactions.
The operations of the Funds, the exchanges, brokers and counterparties with which the Funds do business, and the markets in which the Funds do business could be severely disrupted in the event of a major terrorist attack, natural disaster, cyber-attack or the outbreak, continuation or expansion of war or other hostilities. Global terrorist attacks, anti-terrorism initiatives, and political unrest continue to fuel this concern. In addition, a prolonged U.S. government shutdown could weaken the U.S. economy, interfere with the commodities markets that rely upon data published by U.S. federal government agencies, and prevent the Funds from receiving necessary regulatory review or approvals.
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Failures or breaches of the electronic systems of the Funds, the Sponsor, the Custodian or mutual funds or other financial institutions in which the Funds invest, or the Funds’ other service providers, market makers, Authorized Purchasers, NYSE Arca, exchanges on which Futures Contracts or Other Commodity Interests are traded or cleared, or counterparties have the ability to cause disruptions and negatively impact the Funds’ business operations, potentially resulting in financial losses to a Fund and its shareholders. Such failures or breaches may include intentional cyber-attacks that may result in an unauthorized party gaining access to electronic systems in order to misappropriate a Fund's assets or sensitive information. While the Funds have established business continuity plans and risk management systems seeking to address system breaches or failures, there are inherent limitations in such plans and systems. Furthermore, the Funds cannot control the cyber security plans and systems of the Custodian or mutual funds or other financial institutions in which the Funds invest, or the Funds’ other service providers, market makers, Authorized Purchasers, NYSE Arca, exchanges on which Futures Contracts or Other Commodity Interests are traded or cleared, or counterparties.
The Trust may, in its discretion, suspend the right to redeem Shares of a Fund or postpone the redemption settlement date: (1) for any period during which an applicable exchange is closed other than customary weekend or holiday closing, or trading is suspended or restricted; (2) for any period during which an emergency exists as a result of which delivery, disposal or evaluation of a Fund’s assets is not reasonably practicable; (3) for such other period as the Sponsor determines to be necessary for the protection of Shareholders; (4) if there is a possibility that any or all of the Benchmark Component Futures Contracts of a Fund on the specific exchange where the Fund is traded and from which the NAV of the Fund is calculated will be priced at a daily price limit restriction; or (5) if, in the sole discretion of the Sponsor, the execution of such an order would notbe in the best interest of a Fund or its Shareholders. In addition, the Trust will reject a redemption order if the order is not in proper form as described in the agreement with the Authorized Purchaser or if the fulfillment of the order, in the opinion of its counsel, might be unlawful. Any such postponement, suspension or rejection could adversely affect a redeeming Shareholder. For example, the resulting delay may adversely affect the value of the Shareholder’s redemption proceeds if the NAV of a Fund declines during the period of delay. The Trust Agreement provides that the Sponsor and its designees will not be liable for any loss or damage that may result from any such suspension or postponement. A minimum number of baskets and associated Shares are specified for each Fund in its prospectus and in Part I, Item 1 of this document. Once that minimum number of Shares outstanding is reached, there can be no further redemptions until there has been a Creation Basket.
The Intraday Indicative Value (“IIV”) and the Benchmark for each Fund are calculated and disseminated by ICE Data Indices, LLC under an agreement with the Sponsor. Additionally, information may be calculated and disseminated under similar agreements between the Sponsor and other third-party entities. Although reasonable efforts are taken to ensure the accuracy of the information disseminated under this agreement, there may, from time to time, be recalculations of previously released information.
Third parties may assert that the Sponsor has infringed or otherwise violated their intellectual property rights. Third parties may independently develop business methods, trademarks or proprietary software and other technology similar to that of the Sponsor and claim that the Sponsor has violated their intellectual property rights, including their copyrights, trademark rights, trade names, trade secrets and patent rights. As a result, the Sponsor may have to litigate in the future to determine the validity and scope of other parties’ proprietary rights or defend itself against claims that it has infringed or otherwise violated other parties’ rights. Any litigation of this type, even if the Sponsor is successful and regardless of the merits, may result in significant costs, may divert resources from the Fund, or may require the Sponsor to change its proprietary software and other technology or enter into royalty or licensing agreements. The Sponsor has a patent on certain business methods and procedures used with respect to the Funds. The Sponsor utilizes certain proprietary software. Any unauthorized use of such proprietary software, business methods and/or procedures could adversely affect the competitive advantage of the Sponsor or the Funds and/or cause the Sponsor to take legal action to protect its rights.
In managing and directing the day-to-day activities and affairs of the Funds, the Sponsor relies almost entirely on a small number of individuals, including Mr. Sal Gilbertie, Mr. Steve Kahler and Ms. Cory Mullen-Rusin. If Mr. Gilbertie, Mr. Kahler or Ms. Mullen-Rusin were to leave or be unable to carry out their present responsibilities, it may have an adverse effect on the management of the Funds. To the extent that the Sponsor establishes additional commodity pools, even greater demands will be placed on these individuals.
The Sponsor was formed for the purpose of managing the Trust, including all the Funds, and any other series of the Trust that may be formed in the future, and has been provided with capital primarily by its principals and a small number of outside investors. If the Sponsor operates at a loss for an extended period, its capital will be depleted, and it may be unable to obtain additional financing necessary to continue its operations. If the Sponsor were unable to continue to provide services to these Funds, the Funds would be terminated if a replacement Sponsor could not be found.
You cannot be assured that the Sponsor will be willing or able to continue to service each Fund for any length of time. The Sponsor was formed for the purpose of sponsoring the Funds and other commodity pools and has limited financial resources and no significant source of income apart from its management fees from such commodity pools to support its continued service for each Fund. If the Sponsor discontinues its activities on behalf of a Fund, the Fund may be adversely affected. If the Sponsor’s registrations with the CFTC or memberships in the NFA were revoked or suspended, the Sponsor would no longer be able to provide services to the Funds.
The Funds earn interest on cash balances available for investment. If actual interest rates were to fall, the next investment loss of the Funds could be adversely impacted if the Sponsor were not able to waive expenses sufficient to cover any deficit.
When constructing a diversified portfolio, investors often look for asset classes and individual securities that will enhance the risk adjusted returns of their portfolios. During the security selection process investors typically consider the security’s risk profile as well as its correlation to other portfolio holdings. Commodities are often included in a diversified portfolio due to their low correlation to traditional asset classes such as stocks and bonds. However, it must be noted that portfolio diversification does not eliminate the risk of loss associated with investing. Historical returns and correlations are not guaranteed in the future. It’s important to note that past performance is not indicative of future results and that investments cannot be made directly into indexes which are often used to display correlation results.
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The Sponsor May Have Conflicts of Interest
The structure and operation of the Funds may involve conflicts of interest. For example, a conflict may arise because the Sponsor and its principals and affiliates may trade for themselves. In addition, the Sponsor has sole current authority to manage the investments and operations, and the interests of the Sponsor may conflict with the Shareholders’ best interests, including the authority of the Sponsor to allocate expenses to and between the Funds.
The Performance of Each Fund May Not Correlate with the Applicable Benchmark
If a Fund is required to sell short-term Treasury Securities or cash equivalents at a price lower than the price at which they were acquired, the Fund will experience a loss. This loss may adversely impact the price of the Shares and may decrease the correlation between the price of the Shares, the Benchmark, and the spot price of the specific commodity interest or thecommodity interests of the Underlying Funds in the case of TAGS. The value of short-term Treasury Securities and other debt securities generally moves inversely with movements in interest rates. The prices of longer maturity securities are subject to greater market fluctuations as a result of changes in interest rates. While the short-term nature of a Fund’s investments in short-term Treasury Securities and cash equivalents should minimize the interest rate risk to which the Fund is subject, it is possible that the short-term Treasury Securities and cash equivalents held by the Fund will decline in value.
The Sponsor’s trading system is quantitative in nature, and it is possible that the Sponsor may make errors. In addition, it is possible that a computer or software program may malfunction and cause an error in computation.
Increases in assets under management may affect trading decisions. While all of the Funds’ assets are currently at manageable levels, the Sponsor does not intend to limit the amount of any Fund’s assets. The more assets the Sponsor manages, the more difficult it may be for it to trade profitably because of the difficulty of trading larger positions without adversely affecting prices and performance and of managing risk associated with larger positions.
Each Fund seeks to have the changes in its Shares’ NAV in percentage terms track changes in the Benchmark in percentage terms, rather than profit from speculative trading of the specific Commodity Interests, or the commodity interests of the Underlying Funds in the case of TAGS.
The Sponsor therefore endeavors to manage each Fund so that the Fund’s assets are, unlike those of many other commodity pools, not leveraged (i.e., so that the aggregate amount of the Fund’s exposure to losses from its investments in specific Commodity Interests at any time will not exceed the value of the Fund’s assets). There is no assurance that the Sponsor will successfully implement this investment strategy. If the Sponsor permits a Fund to become leveraged, you could lose all or substantially all of your investment if the Fund’s trading positions suddenly turns unprofitable. These movements in price may be the result of factors outside of the Sponsor’s control and may not be anticipated by the Sponsor.
The Sponsor cannot predict to what extent the performance of the commodity interest will or will not correlate to the performance of other broader asset classes such as stocks and bonds. If the performance of a specific Fund were to move more directly with the financial markets, an investment in the Fund may provide you little or no diversification benefits. Thus, in a declining market, the Fund may have no gains to offset your losses from other investments, and you may suffer losses on your investment in the Fund at the same time you may incur losses with respect to other asset classes. Variables such as drought, floods, weather, embargoes, tariffs and other political events may have a larger impact on commodity and Commodity Interests prices than on traditional securities and broader financial markets. These additional variables may create additional investment risks that subject a Fund’s investments to greater volatility than investments in traditional securities. Lower correlation should not be confused with negative correlation; with negative correlation the performance of two asset classes would be opposite of each other. There is no historic evidence that the spot price of a specific commodity, corn, for example, and prices of other financial assets, such as stocks and bonds, are negatively correlated. In the absence of negative correlation, a Fund cannot be expected to be automatically profitable during unfavorable periods for the stock market, or vice versa.
Under the Trust Agreement, the Trustee and the Sponsor are not liable, and have the right to be indemnified, for any liability or expense incurred absent gross negligence or willful misconduct on the part of the Trustee or Sponsor, as the case may be. That means the Sponsor may require the assets of a Fund to be sold in order to cover losses or liability suffered by the Sponsor or by the Trustee. Any sale of that kind would reduce the NAV of the Fund and the value of its Shares.
The Shares of a Fund are limited liability investments; Shareholders may not lose more than the amount that they invest plus any profits recognized on their investment. However, Shareholders could be required, as a matter of bankruptcy law, to return to the estate of the Fund any distribution they received at a time when the Fund was in fact insolvent or in violation of its Trust Agreement.
The price relationship between the near month Commodity Futures Contract to expire and the Benchmark Component Futures Contracts for each Fund, or the Underlying Funds in the case of TAGS, will vary and may impact both a Fund’s total return over time and the degree to which such total return tracks the total return of the specific commodity price indices. In cases in which the near month contract’s price is lower than later-expiring contracts’ prices (a situation known as “contango” in the futures markets), then absent the impact of the overall movement in the commodity specific prices the value of the Benchmark Component Futures Contracts would tend to decline as they approach expiration which could cause the Benchmark Component Futures Contracts, and therefore the Fund’s total return, to track lower. In cases in which the near month contract’s price is higher than later-expiring contracts’ prices (a situation known as “backwardation” in the futures markets), then absent the impact of the overall movement in commodity specific prices, the value of the Benchmark Component Futures Contracts would tend to rise as they approach expiration.
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While it is expected that the trading prices of the Shares will fluctuate in accordance with the changes in a Fund’s NAV, the prices of Shares may also be influenced by various market factors, including but not limited to, the number of shares of the Fund outstanding and the liquidity of the underlying Commodity Interests. There is no guarantee that the Shares will not trade at appreciable discounts from, and/or premiums to, the Fund’s NAV. This could cause the changes in the price of the Shares to substantially vary from the changes in the spot price of the underlying commodity, even if a Fund’s NAV was closely tracking movements in the spot price of that commodity. If this occurs, you may incur a partial or complete loss of your investment.
In addition to certain fees paid to each Fund's service providers, each Fund pays the Sponsor a fee of 1.00% of assets under management per annum, regardless of Fund Performance. Over time, a Fund's assets could be depleted if investment performance does not exceed such fees.
Investors, including those who directly participate in the specific commodity market, may choose to use a Fund as a vehicle to hedge against the risk of loss, and there are risks involved in hedging activities. While hedging can provide protection against an adverse movement in market prices, it can also preclude a hedger’s opportunity to benefit from a favorable market movement.
While it is not the current intention of the Funds to take physical delivery of any Commodity under its Commodity Interests, Commodity Futures Contracts are traditionally physically deliverable contracts, and, unless a position was traded out of, it is possible to take or make delivery under these and some Other Commodity Interests. Storage costs associated with purchasing the specific commodity could result in costs and other liabilities that could impact the value of the Commodity Futures Contracts or certain Other Commodity Interests. Storage costs include the time value of money invested in the physical commodity plus the actual costs of storing the commodity less any benefits from ownership that are not obtained by the holder of a futures contract. In general, Commodity Futures Contracts have a one-month delay for contract delivery and the pricing of back month contracts (the back month is any future delivery month other than the spot month) includes storage costs. To the extent that these storage costs change for the commodity while a Fund holds the Commodity Interests, the value of the Commodity Interests, and therefore the Fund’s NAV, may change as well.
The Funds are not actively managed and are designed to track a benchmark, regardless of whether the price of the Benchmark Component Futures Contracts is flat, declining, or rising.
The design of each Fund’s Benchmark is such that the Benchmark Component Futures Contracts change throughout the year, and the Fund’s investments must be rolled periodically to reflect the changing composition of the Benchmark. For example, when the second-to-expire Commodity Futures Contract becomes the first-to-expire contract, such contract will no longer be a Benchmark Component Futures Contract and the Fund’s position in it will no longer be consistent with tracking the Benchmark. In the event of a commodity futures market where near-to-expire contracts trade at a higher price than longer-to-expire contracts, a situation referred to as “backwardation,” then absent the impact of the overall movement in the specific commodity prices of the Fund, the value of the Benchmark Component Futures Contracts would tend to rise as they approach expiration. As a result, a Fund may benefit because it would be selling more expensive contracts and buying less expensive ones on an ongoing basis. Conversely, using corn as an example, in the event of a corn futures market where near-to-expire contracts trade at a lower price than longer-to-expire contracts, a situation referred to as “contango,” then absent the impact of the overall movement in corn prices the value of the Benchmark Component Futures Contracts would tend to decline as they approach expiration. As a result, the Fund’s total return may be lower than might otherwise be the case because it would be selling less expensive contracts and buying more expensive ones. The impact of backwardation and contango may lead the total return of a Fund to vary significantly from the total return of other price references, such as the spot price of the specific commodity. In the event of a prolonged period of contango, and absent the impact of rising or falling specific commodity prices, this could have a significant negative impact on a Fund’s NAV and total return.
The Sponsor may use spreads and straddles as part of its overall trading strategy to closely follow the Benchmark. There is a risk that a Fund’s NAV may not closely track the change in its Benchmark. Spreads combine simultaneous long and short positions in related futures contracts that differ by commodity, by market or by delivery month (for example, long April, short November). Spreads gain or lose value as a result of relative changes in price between the long and short positions. Spreads often reduce risk to investors because the contracts tend to move up or down together. However, both legs of the spread could move against an investor simultaneously, in which case the spread would lose value. Certain types of spreads may face unlimited risk, e.g., because the price of a futures contract underlying a short position can increase by an unlimited amount and the investor would have to take delivery or offset at that price. A commodity straddle takes both long and short option positions in the same commodity in the same market and delivery month simultaneously. The buyer of a straddle profits if either the long or the short leg of the straddle moves further than the combined cost of both options. The seller of the straddle profits if both the long and short positions do not trade beyond a range equal to the combined premium for selling both options. If the Sponsor were to utilize a spread or straddle position and the position performed differently than expected, the results could impact that Fund’s tracking error. This could affect the Fund’s investment objective of having its NAV closely track the Benchmark. Additionally, a loss on the position would negatively impact the Fund’s absolute return.
Position limits and daily price fluctuation limits set by the CFTC and the exchanges have the potential to cause tracking error, which could cause the price of Shares of the Fund to substantially vary from the Benchmark and prevent you from being able to effectively use the Fund as a way to hedge against underlying commodity-related losses or as a way to indirectly invest in the underlying commodity.
The Trust Structure and the Trust Agreement Provide Limited Shareholder Rights
You will have no rights to participate in the management of any of the Funds and will have to rely on the duties and judgment of the Sponsor to manage the Funds.
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As interests in separate series of a Delaware statutory trust, the Shares do not involve the rights normally associated with the ownership of shares of a corporation. In addition, the Shares have limited voting and distribution rights (for example, Shareholders do not have the right to elect directors, as the Trust does not have a board of directors, and generally will not receive regular distributions of the net income and capital gains earned by the Fund). The Funds are also not subject to certain investor protection provisions of the Sarbanes Oxley Act of 2002 and the NYSE Arca governance rules (for example, audit committee requirements).
Each Fund is a series of a Delaware statutory trust and not itself a legal entity separate from the other Funds. The Delaware Statutory Trust Act provides that if certain provisions are included in the formation and governing documents of a statutory trust organized in series and if separate and distinct records are maintained for any series and the assets associated with that series are held in separate and distinct records and are accounted for in such separate and distinct records separately from the other assets of the statutory trust, or any series thereof, then the debts, liabilities, obligations and expenses incurred by a particular series are enforceable against the assets of such series only, and not against the assets of the statutory trust generally or any other series thereof. Conversely, none of the debts, liabilities, obligations and expenses incurred with respect to any other series thereof is enforceable against the assets of such series. The Sponsor is not aware of any court case that has interpreted this inter-series limitation on liability or provided any guidance as to what is required for compliance. The Sponsor intends to maintain separate and distinct records for each Fund and account for each Fund separately from any other Trust series, but it is possible a court could conclude that the methods used do not satisfy the Delaware Statutory Trust Act, which would potentially expose assets in any Fund to the liabilities of one or more of the Funds and/or any other Trust series created in the future.
Neither the Sponsor nor the Trustee is obligated to, although each may, in its respective discretion, prosecute any action, suit or other proceeding in respect of any Fund property. The Trust Agreement does not confer upon Shareholders the right to prosecute any such action, suit or other proceeding.
Rapidly Changing Regulation May Adversely Affect the Ability of the Funds to Meet Their Investment Objectives
The regulation of futures markets, futures contracts, and futures exchanges has historically been comprehensive. The CFTC and the exchanges are authorized to take extraordinary actions in the event of a market emergency including, for example, the retroactive implementation of speculative position limits, increased margin requirements, the establishment of daily price limits and the suspension of trading on an exchange or a trading facility.
The regulation of commodity interest transactions in the United States is a rapidly changing area of law and is subject to ongoing modification by governmental and judicial action. Subsequent to the enactment of the Dodd-Frank Act in 2010, swap agreements became fully regulated by the CFTC under the amended Commodity Exchange Act and the CFTC’s regulations thereunder. Considerable regulatory attention has been focused on non-traditional investment pools that are publicly distributed in the United States and that use trading in futures and options as an investment strategy and not for hedging or price discovery purposes, therefore altering traditional participation in futures and swaps markets. As the Dodd-Frank Act continues to be implemented by the CFTC and the SEC, there is a possibility of future regulatory changes within the United States altering, perhaps to a material extent, the nature of an investment in the Funds, or the ability of a Fund to continue to implement its investment strategy. In addition, various national governments outside of the United States have expressed concern regarding the disruptive effects of speculative trading in the commodities markets and the need to regulate the derivatives markets in general. The effect of any future regulatory change on the Funds is impossible to predict but could be substantial and adverse.
Further, President Donald J. Trump has promised and issued several executive orders intended to relieve the financial burden created by the Dodd-Frank Act, although these executive orders only set forth several general principles to be followed by the federal agencies and do not mandate the wholesale repeal of the Dodd-Frank Act. The scope of the effect that passage of new financial reform legislation could have on U.S. securities, derivatives and commodities markets is not clear at this time because each federal regulatory agency would have to promulgate new regulations to implement such legislation. These regulatory changes may affect the continued operation of the Funds. For additional information regarding recent regulatory developments that may impact the Funds or the Trust, refer to the section entitled “Regulatory Considerations” section of this document.
There Is No Assurance that There Will Be a Liquid Market for the Shares of the Funds or the Funds’ Underlying Investments, which May Mean that Shareholders May Not be Able to Sell Their Shares at a Market Price Relatively Close to the NAV
If a substantial number of requests for redemption of Redemption Baskets are received by a Fund during a relatively short period of time, the Fund may not be able to satisfy the requests from the Fund’s assets not committed to trading. As a consequence, it could be necessary to liquidate the Fund’s trading positions before the time that its trading strategies would otherwise call for liquidation.
A portion of a Fund’s investments could be illiquid, which could cause large losses to investors at any time or from time to time.
A Fund may not always be able to liquidate its positions in its investments at the desired price. As to futures contracts, it may be difficult to execute a trade at a specific price when there is a relatively small volume of buy and sell orders in a market. Limits imposed by futures exchanges or other regulatory organizations, such as accountability levels, position limits and price fluctuation limits, may contribute to a lack of liquidity with respect to some exchange-traded commodity Interests. In addition, over-the-counter contracts may be illiquid because they are contracts between two parties and generally may not be transferred by one party to a third party without the counterparty’s consent. Conversely, a counterparty may give its consent, but the Fund still may not be able to transfer an over-the-counter Commodity Interest to a third party due to concerns regarding the counterparty’s credit risk.
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The exchanges set daily price fluctuation limits on futures contracts. The daily price fluctuation limit establishes the maximum amount that the price of futures contracts may vary either up or down from the previous day’s settlement price. Once the daily price fluctuation limit has been reached in a particular futures contract, no trades may be made at a price beyond that limit.
On March 12, 2014, the CME announced that, subject to CFTC approval, it would replace its fixed price fluctuation limits with variable price limits. The change was approved and went into effect May 1, 2014. Using corn as an example, this change amended Appendix A, Chapter 10 (Corn Futures), Section 10102.D (Trading Specifications – Daily Price Limits) to read as follows:
Daily price limits for Corn futures are reset every six months. The first reset date would be the first trading day in May based on the following: Daily settlement prices are collected for the nearest July contract over 45 consecutive trading days before and on the business day prior to April 16th. The average price is calculated based on the collected settlement prices and then multiplied by seven percent. The resulting number rounded to the nearest 5 cents per bushel, or 20 cents per bushel, whichever is higher will be the new initial price limits for Corn futures and will become effective on the first trading day in May and will remain in effect through the last trading day in October.
The second reset date would be the first trading day in November based on the following: Daily settlement prices are collected for the nearest December contract over 45 consecutive trading days before and on the business day prior to October 16th. The average price is calculated based on the collected settlement prices and then multiplied by seven percent. The resulting number, rounded to the nearest 5 cents per bushel, or 20 cents per bushel, whichever is higher, will be the new initial price limits for Corn futures and will become effective on the first trading day in November and will remain in effect through the last trading day in next April.
There shall be no trading in Corn futures at a price more than the initial price limit above or below the previous day’s settlement price. Should two or more Corn futures contract months within the first five listed non-spot contracts (or the remaining contract month in a crop year, which is the September contract) settle at limit, the daily price limits for all contract months shall increase by 50 percent the next business day, rounded up to the nearest 5 cents per bushel. If no Corn futures contract month settles at the expanded limit the next business day, daily price limits for all contract months shall revert back to the initial price limit the following business day. There shall be no price limits on the current month contract on or after the second business day preceding the first day of the delivery month.
A market disruption, such as a foreign government taking political actions that disrupt the market in its currency, its commodity production or exports, or in another major export, can also make it difficult to liquidate a position. Unexpected market illiquidity may cause major losses to investors at any time or from time to time. In addition, no Fund intends at this time to establish a credit facility, which would provide an additional source of liquidity, but instead will rely only on the short-term Treasury Securities, cash and/or cash equivalents that it holds to meet its liquidity needs. The anticipated large value of the positions in a specific Commodity Interest that the Sponsor will acquire or enter into for a Fund increases the risk of illiquidity. Because Commodity Interests may be illiquid, a Fund’s holdings may be more difficult to liquidate at favorable prices in periods of illiquid markets and losses may be incurred during the period in which positions are being liquidated.
A Fund may invest in Other Commodity Interests. To the extent that these Other Commodity Interests are contracts individually negotiated between their parties, they may not be as liquid as Commodity Futures Contracts and will expose the Fund to credit risk that its counterparty may not be able to satisfy its obligations to the Fund.
The changing nature of the participants in the commodity specific market will influence whether futures prices are above or below the expected future spot price. Producers of the specific commodity will typically seek to hedge against falling commodity prices by selling Commodity Futures Contracts. Therefore, if commodity producers become the predominant hedgers in thefutures market, prices of Commodity Futures Contracts will typically be below expected future spot prices. Conversely, if the predominant hedgers in the futures market are the purchasers of the commodity, who purchase Commodity Futures Contracts to hedge against a rise in prices, prices of the Commodity Futures Contracts will likely be higher than expected future spot prices. This can have significant implications for a Fund when it is time to sell a Commodity Futures Contract that is no longer a BenchmarkComponent Futures Contract and purchase a new Commodity Futures Contract or to sell a Commodity Futures Contract to meet redemption requests. A Fund may invest in Other Commodity Interests. To the extent that these Other Commodity Interests are contracts individually negotiated between their parties, they may not be as liquid as Commodity Futures Contracts and will expose the Fund to credit risk that its counterparty may not be able to satisfy its obligations to the Fund.
A Fund’s NAV includes, in part, any unrealized profits or losses on open swap agreements, futures or forward contracts. Under normal circumstances, the NAV reflects the quoted exchange settlement price of open futures contracts on the date when the NAV is being calculated. In instances when the quoted settlement price of a futures contract traded on an exchange may not be reflective of fair value based on market condition, generally due to the operation of daily limits or other rules of the exchange or otherwise, the NAV may not reflect the fair value of open future contracts on such date. For purposes of financial statements and reports, the Sponsor will recalculate the NAV where necessary to reflect the “fair value” of a Futures Contract when the Futures Contract closes at its price fluctuation limit for the day.
In the event that one or more Authorized Purchasers that are actively involved in purchasing and selling Shares cease to be so involved, the liquidity of the Shares will likely decrease, which could adversely affect the market price of the Shares and result in your incurring a loss on your investment. In addition, a decision by a market maker or lead market maker to cease activities for the Fund could adversely affect liquidity, the spread between the bid and ask quotes, and potentially the price of the Shares. The Sponsor can make no guarantees that participation by Authorized Purchasers or market makers will continue.
If a minimum number of Shares is outstanding for a Fund, market makers may be less willing to purchase Shares of that Fund in the secondary market which may limit your ability to sell Shares. There are a minimum number of baskets and associated Shares specified for each Fund. Once the minimum number of baskets is reached, there can be no more redemptions by an Authorized Purchaser of that Fund until there has been a Creation Basket. In such case, market makers may be less willing to purchase Shares of that Fund from investors in the secondary market, which may in turn limit the ability of Shareholders of that Fund to sell their Shares in the secondary market.
Trading in Shares of a Fund may be halted due to market conditions or, in light of NYSE Arca rules and procedures, for reasons that, in the view of the NYSE Arca, make trading in Shares inadvisable. In addition, trading is subject to trading halts caused by extraordinary market volatility pursuant to “circuit breaker” rules that require trading to be halted for a specified period based on a specified market decline. There can be no assurance that the requirements necessary to maintain the listing of the Shares will continue to be met or will remain unchanged. A Fund will be terminated if its Shares are delisted.
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There is Credit Risk Associated with the Operation of the Funds, Service Providers and Counterparties Which May Cause an Investment Loss
For all of the Funds except for TAGS, the majority of each Fund’s assets are held in cash and short-term cash equivalents with the Custodian or with one or more alternate financial institutions unrelated to the Custodian (each, a “Financial Institution”). Any cash or cash equivalents invested by a Fund will be placed by the Sponsor in a Financial Institution deemed by the Sponsor to be of investment quality.
The Sponsor has the ability to invest available cash in Commercial Paper with maturities of 90 days or less. Investments will be deemed by the Sponsor to be of investment quality. There is a risk that the proceeds from the sale of the Commercial Paper could be less than the purchase price.
The insolvency of the Custodian, any Financial Institution in which funds are deposited, or Commercial Paper Issuer could result in a complete loss of a Fund’s assets held by the Custodian or the Financial Institution, which, at any given time, would likely comprise a substantial portion of a Fund’s total assets. Assets deposited with the Custodian or a Financial Institution will generally exceed federally insured limits. For TAGS, the vast majority of the Fund’s assets are held in Shares of the Underlying Funds. The failure or insolvency of the Custodian or the Financial Institution could impact the ability to access in a timely manner TAGS’ assets held by the Custodian.
Under CFTC regulations, a clearing broker with respect to a Fund’s exchange-traded Commodity Interests must maintain customers’ assets in a bulk segregated account. If a clearing broker fails to do so or is unable to satisfy a substantial deficit in a customer account, its other customers may be subject to risk of a substantial loss of their funds in the event of that clearing broker’s bankruptcy. In that event, the clearing broker’s customers, such as a Fund, are entitled to recover, even in respect of property specifically traceable to them, only a proportional share of all property available for distribution to all of that clearing broker’s customers. A Fund also may be subject to the risk of the failure of, or delay in performance by, any exchanges and markets and their clearing organizations, if any, on which Commodity Interests are traded. From time to time, the clearing brokers may be subject to legal or regulatory proceedings in the ordinary course of their business. A clearing broker’s involvement in costly or time-consuming legal proceedings may divert financial resources or personnel away from the clearing broker’s trading operations, which could impair the clearing broker’s ability to successfully execute and clear a Fund’s trades. For additional information regarding recent regulatory developments that may impact the Funds or the Trust, refer to the section entitled “Regulatory Considerations” section of this document.
Commodity pools’ trading positions in futures contracts or other commodity interests are typically required to be secured by the deposit of margin funds that represent only a small percentage of a futures contract’s (or other commodity interest’s) entire market value. This feature permits commodity pools to “leverage” their assets by purchasing or selling futures contracts (or other commodity interests) with an aggregate notional amount in excess of the commodity pool’s assets. While this leverage can increase a pool’s profits, relatively small adverse movements in the price of a pool’s commodity interests can cause significant losses to the pool. While the Sponsor does not intend to leverage the Funds’ assets, it is not prohibited from doing so under the Trust Agreement. If the Sponsor were to cause or permit a Fund to become leveraged, you could lose all or substantially all of your investment if the Fund’s trading positions suddenly turns unprofitable.
An “exchange for related position” (“EFRP”) can be used by the Fund as a technique to facilitate the exchanging of a futures hedge position against a creation or redemption order, and thus the Fund may use an EFRP transaction in connection with the creation and redemption of shares. The market specialist/market maker that is the ultimate purchaser or seller of shares in connection with the creation or redemption basket, respectively, agrees to sell or purchase a corresponding offsetting futures position which is then settled on the same business day as a cleared futures transaction by the FCMs. The Fund will become subject to the credit risk of the market specialist/market maker until the EFRP is settled or terminated. The Fund reports all activity related to EFRP transactions under the procedures and guidelines of the CFTC and the exchanges on which the futures are traded. EFRPs are subject to specific rules of the CME and CFTC guidance. It is likely that EFRP mechanisms will be subject to changes in the future which may make it uneconomical or impossible from the regulatory perspective to utilize this mechanism by the Funds.
A portion of the Fund’s assets may be used to trade over-the-counter Commodity Interests, such as forward contracts or swaps. Over-the-counter contracts are typically traded on a principal-to-principal cleared and non-cleared basis through dealer markets that are dominated by major money center and investment banks and other institutions and that prior to the passage of the Dodd-Frank Act had been essentially unregulatedby the CFTC, although this is an area of pending, substantial regulatory change. The markets for over-the-counter contracts will continue to rely upon the integrity of market participants in lieu of the additional regulation imposed by the CFTC on participants in the futures markets. The forward markets have been largely unregulated, except for anti-manipulation and anti-fraud prohibitions, forward contracts have been executed bi-laterally and, in general historically, forward contracts were not cleared or guaranteed by a third party. On November 16, 2012, the Secretary of the Treasury issued a final determination that exempts both foreign exchange swaps and foreign exchange forwards from the definition of “swap” and, by extension, additional regulatory requirements (such as clearing and margin). The final determination does not extend to other FX derivatives, such as FX options, certain currency swaps, and non-deliverable forwards. While the Dodd-Frank Act and certain regulations adopted thereunder are intended to provide additional protections to participants in the over-the-counter market, the lack of regulation in these markets could expose the Fund in certain circumstances to significant losses in the event of trading abuses or financial failure by participants. While increased regulation of over-the-counter Commodity Interests is likely to result from changes that are required to be effectuated by the Dodd-Frank Act, there is no guarantee that such increased regulation will be effective to reduce these risks.
Each Fund faces the risk of non-performance by the counterparties to the over-the-counter contracts. Unlike in futures contracts, the counterparty to these contracts is generally a single bank or other financial institution, rather than a clearing organization backed by a group of financial institutions. As a result, there will be greater counterparty credit risk in these transactions. A counterparty may not be able to meet its obligations to a Fund, in which case the Fund could suffer significant losses on these contracts. If a counterparty becomes bankrupt or otherwise fails to perform its obligations due to financial difficulties, a Fund may experience significant delays in obtaining any recovery in a bankruptcy or other reorganization proceeding. During any such period, the Fund may have difficulty in determining the value of its contracts with the counterparty, which in turn could result in the overstatement or understatement of the Fund’s NAV. The Fund may eventually obtain only limited recovery or no recovery in such circumstances.
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Over-the-counter contracts may have terms that make them less marketable than Futures Contracts. Over-the-counter contracts are less marketable because they are not traded on an exchange, do not have uniform terms and conditions, and are entered into based upon the creditworthiness of the parties and the availability of credit support, such as collateral, and in general, they are not transferable without the consent of the counterparty. These conditions make such contracts less liquid than standardized futures contracts traded on a commodities exchange and diminish the ability to realize the full value of such contracts. In addition, even if collateral is used to reduce counterparty credit risk, sudden changes in the value of over-the-counter transactions may leave a party open to financial risk due to a counterparty default since the collateral held may not cover a party’s exposure on the transaction in such situations. In general, valuing OTC derivatives is less certain than valuing actively traded financial instruments such as exchange traded futures contracts and securities because the price and terms on which such OTC derivatives are entered into or can be terminated are individually negotiated, and those prices and terms may not reflect the best price or terms available from other sources. In addition, while market makers and dealers generally quote indicative prices or terms for entering into or terminating OTC contracts, they typically are not contractually obligated to do so, particularly if they are not a party to the transaction. As a result, it may be difficult to obtain an independent value for an outstanding OTC derivatives transaction.
There are Risks Associated with Trading in International Markets
A significant portion of the Futures Contracts entered into by the Funds is traded on United States exchanges. However, a portion of the Funds’ trades may take place on markets or exchanges outside the United States. Some non-U.S. markets present risks because they are not subject to the same degree of regulation as their U.S. counterparts. None of the CFTC, NFA, or any domestic exchange regulates activities of any foreign boards of trade or exchanges, including the execution, delivery and clearing of transactions, has the power to compel enforcement of the rules of a foreign board of trade or exchange or of any applicable non-U.S. laws. Similarly, the rights of market participants, such as the Funds, in the event of the insolvency or bankruptcy of a non-U.S. market or broker are also likely to be more limited than in the case of U.S. markets or brokers. As a result, in these markets, the Funds have less legal and regulatory protection than they do when they trade domestically. Currently the Funds do not place trades on any markets or exchanges outside of the United States and do not anticipate doing so in the foreseeable future. In some of these non-U.S. markets, the performance on a futures contract is the responsibility of the counterparty and is not backed by an exchange or clearing corporation and therefore exposes the Funds to credit risk. Additionally, trading on non-U.S. exchanges is subject to the risks presented by exchange controls, expropriation, increased tax burdens and exposure to local economic declines and political instability. An adverse development with respect to any of these variables could reduce the profit or increase the loss earned on trades in the affected international markets.
The price of any non-U.S. Commodity Interest and, therefore, the potential profit and loss on such investment, may be affected by any variance in the foreign exchange rate between the time the order is placed and the time it is liquidated, offset or exercised. As a result, changes in the value of the local currency relative to the U.S. dollar may cause losses to a Fund even if the contract is profitable. The Funds invest primarily in Commodity Interests that are traded or sold in the United States. However, a portion of the trades for a Fund may take place in markets and on exchanges outside the United States. Some non-U.S. markets present risks because they are not subject to the same degree of regulation as their U.S. counterparts. In some of these non-U.S. markets, the performance on a contract is the responsibility of the counterparty and is not backed by an exchange or clearing corporation and therefore exposes a Fund to credit risk. Trading in non-U.S. markets also leaves a Fund susceptible to fluctuations in the value of the local currency against the U.S. dollar.
The CFTC’s implementation of its regulations under the Dodd-Frank Act may further affect the ability of the Funds to enter into foreign exchange contracts and to hedge its exposure to foreign exchange loss.
Some non-U.S. exchanges also may be in a more developmental stage so that prior price histories may not be indicative of current price dynamics. In addition, a Fund may not have the same access to certain positions on foreign trading exchanges as do local traders, and the historical market data on which the Sponsor bases its strategies may not be as reliable or accessible as it is for U.S. exchanges.
The Funds are Treated as Partnerships for Tax Purposes which Means that There May be a Lack of Certainty as to Tax Treatment for an Investor’s Gains and Losses
Cash or property will be distributed at the sole discretion of the Sponsor, and the Sponsor currently does not intend to make cash or other distributions with respect to Shares. You will be required to pay U.S. federal income tax and, in some cases, state, local, or foreign income tax, on your allocable share of a Fund’s taxable income, without regard to whether you receive distributions or the amount of any distributions. Therefore, the tax liability resulting from your ownership of Shares may exceed the amount of cash or value of property (if any) distributed.
Due to the application of the assumptions and conventions applied by a Fund in making allocations for U.S. federal income tax purposes and other factors, your allocable share of the Fund’s income, gain, deduction or loss may be different than your economic profit or loss from your Shares for a taxable year. This difference could be temporary or permanent and, if permanent, could result in your being taxed on amounts in excess of your economic income.
The Funds are treated as partnerships for United States federal income tax purposes. The U.S. tax rules pertaining to entities taxed as partnerships are complex and their application to publicly traded partnerships such as the Funds are in many respects uncertain. The Funds apply certain assumptions and conventions in an attempt to comply with the intent of the applicable rules and to report taxable income, gains, deductions, losses and credits in a manner that properly reflects Shareholders’ economic gains and losses. These assumptions and conventions may not fully comply with all aspects of the Internal Revenue Code of 1986, as amended (the “Code”) and applicable Treasury Regulations, however, and it is possible that the U.S. Internal Revenue Service (the “IRS”) will successfully challenge our allocation methods and require us to reallocate items of income, gain, deduction, loss or credit in a manner that adversely affects you. If this occurs, you may be required to file an amended tax return and to pay additional taxes plus deficiency interest.
Under new procedures and rules that are effective for taxable years beginning after December 31, 2017, the IRS may, instead of collecting the tax from Shareholders, collect any underpayment of tax (including interest and penalties) from a Fund. As a result, any such tax assessment would be borne by Shareholders that own Shares at the time of such assessment, which may be different persons, or persons with different ownership percentages, than persons owning Shares for the tax year at issue.
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The Trust has received an opinion of counsel that, under current U.S. federal income tax laws, the Funds will be treated as partnerships that are not taxable as corporations for U.S. federal income tax purposes, provided that (i) at least 90 percent of each Fund’s annual gross income consists of “qualifying income” as defined in the Code, (ii) the Funds are organized and operated in accordance with their governing agreements and applicable law, and (iii) the Funds do not elect to be taxed as corporations for federal income tax purposes. Although the Sponsor anticipates that the Funds have satisfied and will continue to satisfy the “qualifying income” requirement for all of their taxable years, that result cannot be assured. The Funds have not requested and will not request any ruling from the IRS with respect to their classification as partnerships not taxable as corporations for federal income tax purposes. If the IRS were to successfully assert that the Funds are taxable as corporations for federal income tax purposes in any taxable year, rather than passing through their income, gains, losses and deductions proportionately to Shareholders, each Fund would be subject to tax on its net income for the year at corporate tax rates. In addition, although the Sponsor does not currently intend to make distributions with respect to Shares, any distributions would be taxable to Shareholders as dividend income. Taxation of the Funds as corporations could materially reduce the after-tax return on an investment in Shares and could substantially reduce the value of your Shares.
Legislative, regulatory or administrative changes could be enacted or promulgated at any time, either prospectively or with retroactive effect, and may adversely affect the Funds and their Shareholders. Tax legislation informally known as the Tax Cuts and Jobs Act of 2017 (the “2017 Tax Cuts and Jobs Act”) was signed into law on December 22, 2017, generally effective for taxable years beginning on or after January 1, 2018. In addition to modifying income tax rates for individuals and corporations, the 2017 Tax Cuts and Jobs Act made certain changes to the tax treatment for pass-through entities, such as the Funds. Please consult a tax advisor regarding the implications of the 2017 Tax Cuts and Jobs Act on an investment in Shares of the Funds.
Risks Specific to the Teucrium Corn Fund
Investors may choose to use the Fund as a means of investing indirectly in corn, and there are risks involved in such investments. The risks and hazards that are inherent in corn production may cause the price of corn to fluctuate widely. Price movements for corn are influenced by, among other things: weather conditions, crop failure, production decisions, governmental policies, changing demand, the corn harvest cycle, and various economic and monetary events. Corn production is also subject to U.S. federal, state and local regulations that could materially affect operations.
The price movements for corn are influenced by, among other things, weather conditions, crop disease, transportation difficulties, various planting, growing and harvesting problems, governmental policies, changing demand, and seasonal fluctuations in supply. More generally, commodity prices may be influenced byeconomic and monetary events such as changes in interest rates, changes in balances of payments and trade, U.S. and international inflation rates, currency valuations and devaluations, U.S. and international economic events, and changes in the philosophies and emotions of market participants. Because the Fund invests primarily in interests in a single commodity, it is not a diversified investment vehicle, and therefore may be subject to greater volatility than a diversified portfolio of stocks or bonds or a more diversified commodity pool.
The Fund is subject to the risks and hazards of the corn market because it invests in Corn Interests. The risks and hazards that are inherent in the corn market may cause the price of corn to fluctuate widely. If the changes in percentage terms of the Fund’s Shares accurately track the percentage changes in the Benchmark or the spot price of corn, then the price of its Shares will fluctuate accordingly.
The price and availability of corn is influenced by economic and industry conditions, including but not limited to supply and demand factors such as: crop disease and infestation (including, but not limited to, Leaf Blight, Ear Rot and Root Rot). transportation difficulties. various planting, growing, or harvesting problems. and severe weather conditions (particularly during the spring planting season and the fall harvest) such as drought, floods, or frost that are difficult to anticipate and which cannot be controlled. Demand for corn in the United States to produce ethanol has also been a significant factor affecting the price of corn. In turn, demand for ethanol has tended to increase when the price of gasoline has increased and has been significantly affected by United States governmental policies designed to encourage the production of ethanol. Foreign governments may adopt similar policies regarding ethanol which may also be a significant factor affecting the price of corn. Government policies also have the potential to reduce the demand for ethanol. Additionally, demand for corn is affected by changes in consumer tastes, national, regional and local economic conditions, and demographic trends. Finally, because corn is often used as an ingredient in livestock feed, demand for corn is subject to risks associated with raising livestock.
Corn production is subject to United States federal, state, and local policies and regulations that materially affect operations. Governmental policies affecting the agricultural industry, such as taxes, tariffs, duties, subsidies, incentives, acreage control, and import and export restrictions on agricultural commodities and commodity products, can influence the planting of certain crops, the location and size of crop production, the volume and types of imports and exports, the availabilityand competitiveness of feedstocks as raw materials, and industry profitability. Additionally, corn production is affected by laws and regulations relating to, but not limited to, the sourcing, transporting, storing, and processing of agricultural raw materials as well as the transporting, storing and distributing of related agricultural products. U.S. corn producers also must comply with various environmental laws and regulations, such as those regulating the use of certain pesticides, and local laws that regulate the production of genetically modified crops. In addition, international trade disputes can adversely affect agricultural commodity trade flows by limiting or disrupting trade between countries or regions.
Seasonal fluctuations in the price of corn may cause risk to an investor because of the possibility that Share prices will be depressed because of the corn harvest cycle. In the United States, the corn market is normally at its weakest point, and corn prices are lowest, shortly before and duringthe harvest (between September and November), due to the high supply of corn in the market. Conversely, corn prices are generally highest during the winter and spring (between December and May), when farmer owned corn has largely been sold and used. Seasonal corn market peaks generally occur after planting is complete in May or June, and again as harvest begins around August. These normal market conditions are, however, often influenced by weather patterns, and domestic and global economic conditions, among other factors, and any specific year may not necessarily follow the traditional seasonal fluctuations described above. In the futures market, these seasonal fluctuations are typically reflected in contracts expiring in the relevant season (e.g., contracts expiring during the harvest season are typically priced lower than contracts expiring in the winter and spring). Thus, seasonal fluctuations could result in an investor incurring losses upon the sale of Fund Shares, particularly if the investor needs to sell Shares when the Benchmark Component Futures Contracts are, in whole or part, Corn Futures Contracts expiring in the fall.
The CFTC and U.S. designated contract markets such as the CBOT have established position limits on the maximum net long or net short futures contracts in commodity interests that any person or group of persons under common trading control (other than as a hedge, which an investment by the Fund is not) may hold, own or control. For example, the current position limit for aggregateinvestments at any one time in U.S. exchange traded Corn Futures Contracts, non-U.S. exchange Corn Futures Contracts, and over-the-counter corn swaps are 600 spot month contracts, 33,000 contracts expiring in any other non-spot single month, or 33,000 cumulative totals for all non-spot months. These position limits are fixed ceilings that the Fund would not be able to exceed without specific CFTC authorization.
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All of these limits may potentially cause a tracking error between the price of the Shares and the Benchmark. This may in turn prevent you from being able to effectively use the Fund as a way to hedge against correlated losses or as a way to indirectly invest in corn.
The Fund does not intend to limit the size of the offering and will attempt to expose substantially all of its proceeds to the corn market utilizing Corn Interests. If the Fund encounters position limits, accountability levels, or price fluctuation limits for Corn Futures Contracts on the CBOT, it may then, if permitted under applicable regulatory requirements, purchase Other Corn Interests and/or Corn Futures Contracts listed on foreign exchanges. However, the Corn Futures Contracts available on such foreign exchanges may have different underlying sizes, deliveries, and prices. In addition, the Corn Futures Contracts available on these exchanges may be subject to their own position limits and accountability levels. In any case, notwithstanding the potential availability of these instruments in certain circumstances, position limits could force the Fund to limit the number of Creation Baskets that it sells.
Risks Specific to the Teucrium Soybean Fund
Investors may choose to use the Fund as a means of investing indirectly in soybeans, and there are risks involved in such investments. The risks and hazards that are inherent in soybean production may cause the price of soybeans to fluctuate widely. Global price movements for soybeans are influenced by, among other things: weather conditions, crop failure, production decisions, governmental policies, changing demand, the soybean harvest cycle, and various economic and monetary events. Soybean production is also subject to domestic and foreign regulations that could materially affect operations.
As discussed in more detail below, price movements for soybeans are influenced by, among other things, weather conditions, crop disease, transportation difficulties, various planting, growing and harvesting problems, governmental policies, changing demand, and seasonal fluctuations in supply. More generally, commodity prices may be influenced by economic and monetary events such as changes in interest rates, changes in balances of payments and trade, U.S. and international inflation rates, currency valuations and devaluations, U.S. and international economic events, and changes in the philosophies and emotions of market participants. Because the Fund invests primarily in interests in a single commodity, it is not a diversified investment vehicle, and therefore may be subject to greater volatility than a diversified portfolio of stocks or bonds or a more diversified commodity pool.
The Fund is subject to the risks and hazards of the soybean market because it invests in Soybean Interests. The risks and hazards that are inherent in the soybean market may cause the price of soybeans to fluctuate widely. If the changes in percentage terms of the Fund’s Shares accurately track the percentage changes in the Benchmark or the spot price of soybeans, then the price of its Shares will fluctuate accordingly.
The price and availability of soybeans is influenced by economic and industry conditions, including but not limited to supply and demand factors such as: crop disease, weed control, water availability, various planting, growing, or harvesting problems. Severe weather conditions such as drought, floods, heavy rains, frost, uncontrolled fires, (including arson), or natural disasters that are difficult to anticipate and which cannot be controlled. Additionally, demand for soybeans is affected by changes in international, national, regional and local economic conditions, challenges in doing business with foreign companies, legal and regulatory restrictions, transportation costs, interruptions in energy supply, currency exchange rate fluctuations, political and economic instability as well as demographic trends. The increased production of soybean crops in South America and the rising demand for soybeans in emerging nations such as China and India have increased competition in the soybean market.
The supply of soybeans could be reduced by the spread of soybean rust. Soybean rust is a wind-borne fungal disease that attacks soybeans. Although soybean rust can be killed with chemicals, chemical treatment increases production costs for farmers.
Soybean production is subject to United States and foreign policies and regulations that materially affect operations. Governmental policies affecting the agricultural industry, such as taxes, tariffs, duties, subsidies, incentives, acreage control, and import and export restrictions on agricultural commodities and commodity products, can influence the planting of certain crops, the location and size of crop production, the volume and types of imports and exports, and industry profitability. Additionally, soybean production is affected by laws and regulations relating to, but not limited to, the sourcing, transporting, storing and processing of agricultural raw materials as well as the transporting, storing and distributing of related agricultural products. Soybean producers also mayneed to comply with various environmental laws and regulations, such as those regulating the use of certain pesticides. In addition, international trade disputes can adversely affect agricultural commodity trade flows by limiting or disrupting trade between countries or regions.
Because processing soybean oil can create trans fats, the demand for soybean oil may decrease due to heightened governmental regulation of trans fats or trans fatty acids. The U.S. Food and Drug Administration currently requires food manufacturers to disclose levels of trans fats contained in their products, and various local governments have enacted or are considering restrictions on the use of trans fats in restaurants. Several food processors have either switched or indicated an intention to switch to oil products with lower levels of trans fats or trans fatty acids.
In recent years, there has been increased global interest in the production of biofuels as alternatives to traditional fossil fuels and as a means of promoting energy independence. Soybeans can be converted into biofuels such as biodiesel. Accordingly, the soybean market has become increasingly affected by demand for biofuels and related legislation.
The costs related to soybean production could increase and soybean supply could decrease as a result of restrictions on the use of genetically modified soybeans, including requirements to segregate genetically modified soybeans and the products generated from them from other soybean products.
Seasonal fluctuations in the price of soybeans may cause risk to an investor because of the possibility that Share prices will be depressed because of the soybean harvest cycle. In the futures market, fluctuations are typically reflected in contracts expiring in the harvest season (i.e., contracts expiring during the fall are typically priced lower than contracts expiring in the winter and spring). Thus, seasonal fluctuations could result in an investor incurring losses upon the sale of Fund Shares, particularly if the investor needs to sell Shares when the Benchmark Component Futures Contracts are, in whole or part, Soybean Futures Contracts expiring in the fall.
The CFTC and U.S. designated contract markets have established position limits on the maximum net long or net short futures contracts in commodity interests that any person or group of persons under common trading control (other than as a hedge, which an investment by the Fund is not) may hold, own or control. For example, the current position limit for aggregate investmentsat any one time in U.S. exchange traded Soybean Futures Contracts, non--U.S. exchange Soybean Futures Contracts, and over-the-counter soybean swaps are 600 spot month contracts, 15,000 contracts expiring in any other single non--spot month, or 15,000 cumulative totals for all non-spot months. These position limits are fixed ceilings that the Fund would not be able to exceed without specific CFTC authorization.
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All of these limits may potentially cause a tracking error between the price of the Shares and the Benchmark. This may in turn prevent you from being able to effectively use the Fund as a way to hedge against soybean related losses or as a way to indirectly invest in soybeans.
If the Fund encounters position limits or price fluctuation limits for Soybean Futures Contracts on the CBOT, it may then, if permitted under applicable regulatory requirements, purchase Other Soybean Interests and/or Soybean Futures Contracts listed on foreign exchanges. However, the Soybean Futures Contracts available on such foreign exchanges may have different underlying sizes, deliveries, and prices. In addition, the Soybean Futures Contracts available on these exchanges may be subject to their own position limits or similar restrictions. In any case, notwithstanding the potential availability of these instruments in certain circumstances, position limits could force the Fund to limit the number of Creation Baskets that it sells.
Risks Specific to the Teucrium Sugar Fund
Investors may choose to use the Fund as a means of investing indirectly in sugar, and there are risks involved in such investments. The risks and hazards that are inherent in sugar production may cause the price of sugar to fluctuate widely. Global price movements for sugar are influenced by, among other things: weather conditions, crop failure, production decisions, governmental policies, changing demand, the sugar harvest cycle, and various economic and monetary events. Sugar production is also subject to domestic and foreign regulations that could materially affect operations.
As discussed in more detail below price movements for sugar are influenced by, among other things, weather conditions, crop disease, transportation difficulties, various planting, growing and harvesting problems, governmental policies, changing demand, and seasonal fluctuations in supply. More generally, commodity prices may be influenced by economic and monetary events such as changes in interest rates, changes in balances of payments and trade, U.S. and international inflation rates, currency valuations and devaluations, U.S. and international economic events, and changes in the philosophies and emotions of market participants. Because the Fund invests primarily in interests in a single commodity, it is not a diversified investment vehicle, and therefore may be subject to greater volatility than a diversified portfolio of stocks or bonds or a more diversified commodity pool.
The Fund is subject to the risks and hazards of the world sugar market because it invests in Sugar Interests. The two primary sources for the production of sugar are sugarcane and sugar beets, both of which are grown in various countries around the world. The risks and hazards that are inherent in the world sugar market may cause the price of sugar to fluctuate widely. If the changes in percentage terms of the Fund’s Shares accurately track the percentage changes in the Benchmark or the spot price of sugar, then the price of its Shares will fluctuate accordingly.
The global price and availability of sugar is influenced by economic and industry conditions, including but not limited to supply and demand factors such as: crop disease, weed control, water availability, various planting, growing, or harvesting problems. severe weather conditions such as drought, floods, or frost that are difficult to anticipate and which cannot be controlled, uncontrolled fires, including arson. Additionally, demand for sugar is affected by changes in consumer tastes, national, regional and local economic conditions, challenges in doing business with foreign companies legal and regulatory restrictions, fluctuation of shipping rates, currency exchange rate fluctuations, political and economic instability as well as demographic trends. Global demand for sugar to produce ethanol has also been a significant factor affecting the price of sugar. rising affluence of emerging nations such as China and India have created demand for sugar. An influx of peoplein developing countries moving from rural to urban areas may create more disposable income to be spent on sugar products and might also reduce sugar production in rural areas on account of worker shortages, all of which would result in upward pressure on sugar prices. On the other hand, public health concerns regarding obesity, heart disease and diabetes, particularly in developed countries, may reduce demand for sugar. Due to the length of time it takes to grow sugarcane and sugar beets and the cost of new facilities for processing these crops, it may not be possible to increase supply quickly or in a cost-effective manner, in order to meet an increase in demand for sugar.
Sugar production is subject to United States and foreign policies and regulations that materially affect operations. Governmental policies affecting the agricultural industry, such as taxes, tariffs, duties, subsidies, incentives, acreage control, and import and export restrictions on agricultural commodities and commodity products, can influence the planting of certain crops, the location and size of crop production, the volume and types of imports and exports, and industry profitability. Many foreign countries subsidize sugar production, resulting in lower prices, but this has led other countries, including the United States, to impose tariffs and import restrictions on sugar imports. Sugar producers also may need to comply with various environmental laws and regulations, such as those regulating the use of certain pesticides.
Seasonal fluctuations in the price of sugar may cause risk to an investor because of the possibility that Share prices will be depressed because of the sugar harvest cycle. In the futures market, contracts expiring during the harvest season are typically priced lower than contracts expiring in the winter and spring. While the sugar harvest seasons varies from country to country, prices of Sugar Futures Contracts tend to be lowest in the late spring and early summer and again in early autumn of the Northern Hemisphere, reflecting the varied harvest seasons in Brazil, India, and Thailand the world’s leading producers and exporters of sugarcane. Thus, seasonal fluctuations could result in an investor incurring losses upon the sale of Fund Shares, particularly if the investor needs to sell Shares when the Benchmark Component Futures Contracts are, in whole or part, Sugar Futures Contracts expiring in the Northern Hemisphere’s late spring, early summer, or early autumn.
U.S. designated contract markets such as the ICE Futures and the NYMEX have established position limits and accountability levels on the maximum net long or net short Sugar Futures Contracts that any person or group of persons under common trading control may hold, own or control. The CFTC has not currently set position limits for Sugar Futures Contracts, and the ICE Futures and the NYMEX have established position limits only on spot month Sugar No. 11 Futures Contracts. For example, the ICE Futures’ position limit for Sugar No. 11 Futures Contracts is 5,000 spot month contracts, whereas the NYMEX Sugar No. 11 Futures limit is 1,000 spot month contracts, generally applicable only during the last month before expiration. All Sugar Futures Contracts held under the control of the Sponsor, including those held by any future series of the Trust, will be aggregated in determining the application of these position limits. However, because spot month contracts are not Benchmark Component Futures Contracts and the Fund’s roll strategy calls for the sale of all spot month Sugar No.11 Futures Contracts prior to the time the position limits would become applicable, it is unlikely that position limits on Sugar Futures Contracts will come into play.
In contrast to position limits, accountability levels are not fixed ceilings, but rather thresholds above which an exchange may exercise greater scrutiny and control over an investor, including by imposing position limits on the investor. For example, the current ICE Futures established accountability level for investments in Sugar No. 11 Futures Contracts for any one month is 10,000, and the accountability level for all combined months is 15,000. (The current accountability level for Sugar No. 11 Futures Contracts traded on the NYMEX is 9,000 for any one month, and 9,000 for all combined months. Even though accountability levels are not fixed ceilings, the Fund does not intend to invest in Sugar Futures Contracts in excess of any applicable accountability levels.
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All of these limits may potentially cause a tracking error between the price of the Shares and the Benchmark. This may in turn prevent you from being able to effectively use the Fund as a way to hedge against sugar related losses or as a way to indirectly invest in sugar.
If the Fund encounters accountability levels, position limits, or price fluctuation limits for Sugar Futures Contracts on ICE Futures, it may then, if permitted under applicable regulatory requirements, purchase Other Sugar Interests and/or Sugar Futures Contracts listed on the NYMEX or foreign exchanges. However, the Sugar Futures Contracts available on such foreign exchanges may have different underlying sizes, deliveries, and prices. In addition, the Sugar Futures Contracts available on these exchanges may be subject to their own position limits and accountability levels. In any case, notwithstanding the potential availability of these instruments in certain circumstances, position limits could force the Fund to limit the number of Creation Baskets that it sells.
Risks Specific to the Teucrium Wheat Fund
Investors may choose to use the Fund as a means of investing indirectly in wheat, and there are risks involved in such investments. The risks and hazards that are inherent in wheat production may cause the price of wheat to fluctuate widely. Price movements for wheat are influenced by, among other things: weather conditions, crop failure, production decisions, governmental policies, changing demand, the wheat harvest cycle, and various economic and monetary events. Wheat production is also subject to U.S. federal, state and local regulations that could materially affect operations.
As discussed in more detail below, price movements for wheat are influenced by, among other things, weather conditions, crop disease, transportation difficulties, various planting, growing and harvesting problems, governmental policies, changing demand, and seasonal fluctuations in supply. More generally, commodity prices may be influenced by economic and monetary events such as changes in interest rates, changes in balances of payments and trade, U.S. and international inflation rates, currency valuations and devaluations, U.S. and international economic events, and changes in the philosophies and emotions of market participants. Because the Fund invests primarily in interests in a single commodity, it is not a diversified investment vehicle, and therefore may be subject to greater volatility than a diversified portfolio of stocks or bonds or a more diversified commodity pool.
The Fund is subject to the risks and hazards of the wheat market because it invests in Wheat Interests. The risks and hazards that are inherent in the wheat market may cause the price of wheat to fluctuate widely. If the changes in percentage terms of the Fund’s Shares accurately track the percentage changes in the Benchmark or the spot price of wheat, then the price of its Shares will fluctuate accordingly.
The price and availability of wheat is influenced by economic and industry conditions, including but not limited to supply and demand factors such as: crop disease, weed control, water availability, various planting, growing, harvesting problems, severe weather conditions such as drought, floods, or frost that are difficult to anticipate and which cannot be controlled. Demand for food products made from wheat flour is affected by changes in consumer tastes, national, regional and local economic conditions, and demographic trends. More specifically, demand for such food products in the United States is relatively unaffected by changes in wheat prices or disposable income but is closely tied to tastes and preferences. For example, in recent years the increase in the popularity of low carbohydrate diets caused the consumption of wheat flour to decrease rapidly before rebounding. Export demand for wheat fluctuates yearly, based largely on crop yields in the importing countries.
Wheat production is subject to United States federal, state and local policies and regulations that materially affect operations. Governmental policies affecting the agricultural industry, such as taxes, tariffs, duties, subsidies, incentives, acreage control, and import and export restrictions on agricultural commodities and commodity products, can influence the planting of certain crops, the location and size of crop production,the volume and types of imports and exports, the availability and competitiveness of feedstocks as raw materials, and industry profitability. Additionally, wheat production is affected by laws and regulations relating to, but not limited to, the sourcing, transporting, storing and processing of agricultural raw materials as well as the transporting, storing and distributing of related agricultural products. U.S. wheat producers also must comply with various environmental laws and regulations, such as those regulating the use of certain pesticides, and local laws that regulate the production of genetically modified crops. In addition, international trade disputes can adversely affect agricultural commodity trade flows by limiting or disrupting trade between countries or regions.
Seasonal fluctuations in the price of wheat may cause risk to an investor because of the possibility that Share prices will be depressed because of the wheat harvest cycle. In the United States, the market for winter wheat, the type of wheat upon which CBOT Wheat Futures Contracts are based, is at its lowest point, and wheat prices are lowest, shortly before and during the harvest (in the spring or early summer), due to the high supply of wheat in the market. Conversely, winter wheat prices are generally highest in the fall or early winter, when the wheat harvested that year has largely been sold and used. In the futures market, these seasonal fluctuations are typically reflected in contracts expiring in the relevant season (e.g., contracts expiring during the harvest season are typically priced lower than contracts expiring in the fall and early winter). Thus, seasonal fluctuations could result in an investor incurring losses upon the sale of Fund Shares, particularly if the investor needs to sell Shares when the Benchmark Component Futures Contracts are, in whole or part, Wheat Futures Contracts expiring in the spring.
Position limits and daily price fluctuation limits set by the CFTC and the exchanges have the potential to cause tracking error, which could cause the price of Shares to substantially vary from the Benchmark and prevent you from being able to effectively use the Fund as a way to hedge against wheat related losses or as a way to indirectly invest in wheat.
The CFTC and U.S. designated contract markets such as the CBOT have established position limits on the maximum net long or net short futures contracts in commodity interests that any person or group of persons under common trading control (other than as a hedge, which an investment by the Fund is not) may hold, own or control. For example, the current position limit for aggregate investments at any one time per exchange in U.S. exchange traded Wheat Futures Contracts, non--U.S. exchange linked Wheat Futures Contracts, and over-the-counter wheat swaps are 600 spot month contracts, 12,000 contracts expiring in any other single month, or cumulative 12,000 total for all months. These position limits are fixed ceilings that the Fund would not be able to exceed without specific CFTC authorization.
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If the Fund encounters position limits, accountability levels, or price fluctuation limits for Wheat Futures Contracts on the CBOT, it may then, if permitted under applicable regulatory requirements, purchase Other Wheat Interests and/or Wheat Futures Contracts listed on other U.S. exchanges or on foreign exchanges. However, the Wheat Futures Contracts available on such foreign exchanges may have different underlying sizes, deliveries, and prices. In addition, the Wheat Futures Contracts available on these exchanges may be subject to their own position limits and accountability levels. In any case, notwithstanding the potential availability of these instruments in certain circumstances, position limits could force the Fund to limit the number of Creation Baskets that it sells.
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

(a) | None.

(b) | On July 31, 2010, for all Funds listed below except the Teucrium Agricultural Fund for which the contribution was made on April 1, 2011, the Sponsor made the following capital contributions and received the following shares for that contribution prior to each Fund’s commencement of operations; such shares were sold in private offerings exempt from registration under Section 4(2) of the Securities Act of 1933, as amended:

1. | a $100 capital contribution to the Teucrium Soybean Fund, another series of the Trust, in exchange for four shares of such fund;

2. | a $100 capital contribution to the Teucrium Sugar Fund, another series of the Trust, in exchange for four shares of such fund; and

3. | a $100 capital contribution to the Teucrium Wheat Fund, another series of the Trust, in exchange for four shares of such fund.

4. | a $100 capital contribution to the Teucrium Agricultural Fund, another series of the Trust, in exchange for two shares of such fund.

The original registration statement on Form S-1 registering 30,000,000 common units, or “Shares,” of the Teucrium Corn Fund (File No. 333-162033) was declared effective on June 7, 2010. A second registration statement on Form S-1 (File No. 333-187463) which replaced the original registration statement was declared effective on April 30, 2013, a third registration statement on Form S-1 (File No. 333-210010) which replaced thesecond registration statement was declared effective on April 29, 2016, and a fourth registration statement on Form S-1 (File No. 333-230626) which replaced the third registration statement was declared effective on April 29, 2019. From June 9, 2010 (the commencement of operations) through June 30, 2019, 19,675,000 Shares of the Fund were sold at an aggregate offering price of $548,652,362. The Fund paid fees to Foreside Fund Services, LLC for its services to the Fund from June 9, 2010 (the commencement of operations) through June 30, 2019 in an amount equal to $913,310, resulting in net offering proceeds of $547,739,052. The offering proceeds were invested in corn futures contracts and cash and cash equivalents in accordance with the Fund’s investment objective stated in the prospectus.
The original registration statement on Form S-1 registering 10,000,000 common units, or “Shares,” of Teucrium Soybean Fund (File No. 333-167590) was declared effective on June 13, 2011. A second registration statement on Form S-1 (File No. 333-196210) which replaced the original registration statement was declared effective on June 30, 2014. A third registration statement on Form S-1 (File No. 333-223940) which registered a total of 11,650,000 shares was declared effective on April 30, 2018. From September 19, 2011 (the commencement of the offering) through June 30, 2019, 5,275,000 Shares of the Fund were sold at an aggregate offering price of $99,653,826. The Fund paid fees to Foreside Fund Services, LLC for its services to the Fund through June 30, 2019 in an amount equal to $131,600, resulting in net offering proceeds of $99,522,226. The offering proceeds were invested in soybean futures contracts and cash and cash equivalents in accordance with the Fund’s investment objective stated in the prospectus.
The original registration statement on Form S-1 registering 10,000,000 common units, or “Shares,” of Teucrium Sugar Fund (File No. 333-167585) was declared effective on June 13, 2011. A second registration statement on Form S-1 (File No. 333-196211) which replaced the original registration statement was declared effective on June 30, 2014. A third registration statement on Form S-1 (File No. 333-223941) which registered a total of 12,500,000 shares was declared effective on April 30, 2018. From September 19, 2011 (the commencement of the offering) through June 30, 2019, 4,775,000 Shares of the Fund were sold at an aggregate offering price of $47,213,858. The Fund paid fees to Foreside Fund Services, LLC for its services to the Fund through June 30, 2019 in an amount equal to $63,636, resulting in net offering proceeds of $47,150,221. The offering proceeds were invested in sugar futures contracts and cash and cash equivalents in accordance with the Fund’s investment objective stated in the prospectus.
The original registration statement on Form S-1 registering 10,000,000 common units, or “Shares,” of Teucrium Wheat Fund (File No. 333-167591) was declared effective on June 13, 2011. A second registration statement on Form S-1 (File No. 333-196209) which replaced the original registration statement was declared effective on June 30, 2014. A third registration statement on Form S-1 (File No. 333-212481) which registered a total of 25,350,000 shares was declared effective on July 15, 2016. A fourth registration statement on Form S-1 (File No. 333-230623) which registered a total of 43,575,000 shares was declared effective on April 29, 2019. From September 19, 2011 (the commencement of the offering) through June 30, 2019, 20,675,000 Shares of the Fund were sold at an aggregate offering price of $179,112,960. The Fund paid fees to Foreside Fund Services, LLC for its services to the Fund through June 30, 2019 in an amount equal to $299,473, resulting in net offering proceeds of $178,813,487. The offering proceeds were invested in wheat futures contracts and cash and cash equivalents in accordance with the Fund’s investment objective stated in the prospectus.
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The original registration statement on Form S-1 registering 5,000,000 common units, or “Shares,” of Teucrium Agricultural Fund (File No. 333-173691) was declared effective on February 10, 2012. A second registration statement on Form S-1 (File No. 333-201953) which replaced the original registration statement was declared effective on April 30, 2015. A third registration statement on Form S-1 (File No. 333-223943) which replaced the second registration statement was declared effective on April 30, 2018. From March 28, 2012 (the commencement of the offering) through June 30, 2019, 375,000 Shares of the Fund were sold at an aggregate offering price of $18,285,685. The Fund paid fees to Foreside Fund Services, LLC for its services to the Fund through June 30, 2019 in an amount equal to $10,606, resulting in net offering proceeds of $18,275,079. The offering proceeds were invested in Shares of the Underlying Funds and cash and cash equivalents in accordance with the Fund’s investment objective stated in the prospectus.
Issuer Purchases of CORN Shares:

Period | Total Number of Shares Purchased | Average Price Paid per Share | Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs | Maximum Number (or Approximate Dollar Value) of Shares that May Yet Be Purchased Under the Plans or Programs
April 1, to April 30, 2019 | - | - | N/A | N/A
May 1 to May 31, 2019 | 50,000 | $14.84 | N/A | N/A
June 1 to June 30, 2019 | - | - | N/A | N/A
Total | 50,000 | $14.84 |  |

Issuer Purchases of CANE Shares:

Period | Total Number of Shares Purchased | Average Price Paid per Share | Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs | Maximum Number (or Approximate Dollar Value) of Shares that May Yet Be Purchased Under the Plans or Programs
April 1, to April 30, 2019 | - | - | N/A | N/A
May 1 to May 31, 2019 | 250,000 | $6.93 | N/A | N/A
June 1 to June 30, 2019 | - | - | N/A | N/A
Total | 250,000 | $6.93 |  |

Issuer Purchases of WEAT Shares:

Period | Total Number of Shares Purchased | Average Price Paid per Share | Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs | Maximum Number (or Approximate Dollar Value) of Shares that May Yet Be Purchased Under the Plans or Programs
April 1, to April 30, 2019 | 100,000 | $5.29 | N/A | N/A
May 1 to May 31, 2019 | 325,000 | $5.43 | N/A | N/A
June 1 to June 30, 2019 | 350,000 | $5.85 | N/A | N/A
Total | 775,000 | $5.60 |  |

Issuer Purchases of SOYB Shares: Nothing to Report
Issuer Purchases of TAGS Shares: Nothing to Report
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Item 3. Defaults Upon Senior Securities
None.
Item 4. Mine Safety Disclosures
None.
Item 5. Other Information
(a) None.
(b) Not Applicable.
173
Item 6. Exhibits
The following exhibits are filed as part of this report as required under Item 601 of Regulation S-K:

31.1 | Certification by the Principal Executive Officer of the Registrant pursuant to Rules 13a-14 and 15d-14 of the Exchange Act. (1)
31.2 | Certification by the Principal Financial Officer of the Registrant pursuant to Rules 13a-14 and 15d-14 of the Exchange Act. (1)
32.1 | Certification by the Principal Executive Officer of the Registrant pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. (1)
32.2 | Certification by the Principal Financial Officer of the Registrant pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. (1)
101.INS | XBRL Instance Document
101.SCH | XBRL Taxonomy Extension Schema
101.CAL | XBRL Taxonomy Extension Calculation Linkbase
101.DEF | XBRL Taxonomy Definition Linkbase
101.LAB | XBRL Taxonomy Extension Label Linkbase
101.PRE | XBRL Taxonomy Extension Presentation Linkbase

(1) Filed herewith.
174
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.
Teucrium Commodity Trust (Registrant)

By: | Teucrium Trading, LLC |
| its Sponsor |
By: | /s/ Cory Mullen-Rusin |
Name: | Cory Mullen-Rusin |
| Chief Financial Officer |
| Date August 9, 2019 |

Teucrium Commodity Trust (Registrant)

By: | Teucrium Trading, LLC |
| its Sponsor |
By: | /s/ Sal Gilbertie |
Name: | Sal Gilbertie |
| Chief Executive Officer |
| Date: August 9, 2019 |