Derivative Instruments and Hedging Activities (Trust) (Teucrium Commodity Trust [Member])

6 Months Ended

Jun. 30, 2014

Teucrium Commodity Trust [Member]

Derivative Instruments and Hedging Activities

Note 4 - 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 counterparty risk due to inability of  its counterparties to meet the terms of their contracts. For the six months ended June 30, 2014 and 2013, the Funds invested only in commodity futures contracts specifically related to each Fund. Cleared Swaps have standardized terms similar to, and are priced by reference to, a corresponding Benchmark Component Futures Contract.  Additionally, Other Commodity Interests that do not have standardized terms and are not exchange-traded, referred to as "over-the-counter" Interests, can generally be structured as the parties to the Commodity Interest contract desire.  Therefore, each Fund might enter into multiple Cleared Swaps and/or over-the-counter Interests intended to exactly 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 not necessarily correlate exactly with the performance of the Benchmark or the applicable Benchmark Component Futures Contract.  

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 Futures Commission Merchant ("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 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 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 as of June 30, 2014 and December 31, 2013.

Offsetting of Financial Assets and Derivative Assets as of June 30, 2014

	(i)		(ii)		(iii) = (i) - (ii)		(iv)				(v) = (iii) - (iv)
							Gross Amount Not Offset in the
							Statement of Assets and Liabilities
			Gross Amount		Net Amount
			Offset in the		Presented in the
	Gross Amount		Statement of		Statement of
	of Recognized		Assets and		Assets and		Financial		Cash Collateral
Description	Assets		Liabilities		Liabilities		Instruments		Received		Net Amount
Commodity price
Natural gas futures contracts	$	75,120	$	-	$	75,120	$	8,400	$	-	$	66,720
WTI crude oil futures contracts		196,210		-		196,210		-		142,990		53,220
Soybean futures contracts		4,762		-		4,762		4,762		-		-
Sugar futures contracts		17,405		-		17,405		12,141		-		5,264

Offsetting of Financial Liabilities and Derivative Liabilities as of June 30, 2014

	(i)		(ii)		(iii) = (i) - (ii)		(iv)				(v) = (iii) - (iv)
							Gross Amount Not Offset in the
							Statement of Assets and Liabilities
			Gross Amount		Net Amount
			Offset in the		Presented in the
	Gross Amount		Statement of		Statement of
	of Recognized		Assets and		Assets and		Financial		Cash Collateral
Description	Liabilities		Liabilities		Liabilities		Instruments		Pledged		Net Amount
Commodity price
Corn futures contracts	$	9,730,475	$	-	$	9,730,475	$	-	$	9,730,475	$	-
Natural gas futures contracts		8,400		-		8,400		8,400		-		-
Soybean futures contracts		178,962		-		178,962		4,762		174,200		-
Sugar futures contracts		12,141		-		12,141		12,141		-		-
Wheat futures contracts		1,818,912		-		1,818,912		-		1,818,912		-

Offsetting of Financial Assets and Derivative Assets as of December 31, 2013

(i)

(ii)

(iii) = (i) - (ii)

(iv)

(v) = (iii) - (iv)

Gross Amount Not Offset in the

Statement of Assets and Liabilities

Gross Amount

Net Amount

Offset in the

Presented in the

Gross Amount

Statement of

Statement of

of Recognized

Assets and

Assets and

Financial

Cash Collateral

Description

Assets

Liabilities

Liabilities

Instruments

Received

Net Amount

Commodity price

Natural gas futures contracts

$

84,050

$

-

$

84,050

$

-

$

74,157

$

9,893

WTI crude oil futures contracts

87,530

-

87,530

5,080

23,445

59,005

Offsetting of Financial Liabilities and Derivative Liabilities as of December 31, 2013

	(i)		(ii)		(iii) = (i) - (ii)		(iv)				(v) = (iii) - (iv)
							Gross Amount Not Offset in the
							Statement of Assets and Liabilities
			Gross Amount		Net Amount
			Offset in the		Presented in the
	Gross Amount		Statement of		Statement of
	of Recognized		Assets and		Assets and		Financial		Cash Collateral
Description	Liabilities		Liabilities		Liabilities		Instruments		Pledged		Net Amount
Commodity price
Corn futures contracts	$	4,884,788	$	-	$	4,884,788	$	-	$	4,884,788	$	-
WTI crude oil futures contracts		5,080		-		5,080		5,080		-		-
Soybean futures contracts		188,863		-		188,863		-		188,863		-
Sugar futures contracts		183,400		-		183,400		-		183,400		-
Wheat futures contracts		698,675		-		698,675		-		698,675		-

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

Three months ended June 30, 2014

	Realized  Gain on		Net Change in Unrealized (Loss)
Primary Underlying Risk	Derivative Instruments		Gain on Derivative Instruments
Commodity price
Corn futures contracts	$	2,609,112	$	(15,931,100	)
Natural gas futures contracts		68,960		(38,490	)
WTI crude oil futures contracts		93,280		59,110
Soybean futures contracts		216,475		(310,688	)
Sugar futures contracts		6,664		(35,582	)
Wheat futures contracts		355,538		(2,606,925	)
Total commodity futures contracts	$	3,350,029	$	(18,863,675	)

Three months ended June 30, 2013

	Realized (Loss) Gain on			Net Change in Unrealized Gain
Primary Underlying Risk	Derivative Instruments			(Loss) on Derivative Instruments
Commodity price
Corn futures contracts	$	(1,820,791	)	$	1,075
Natural gas futures contracts		11,680			(428,040	)
WTI crude oil futures contracts		(77,810	)		15,180
Soybean futures contracts		42,650			13,513
Sugar futures contracts		(199,292	)		25,088
Wheat futures contracts		(370,837	)		(78,012	)
Total commodity futures contracts	$	(2,414,400	)	$	(451,196	)

Six months ended June 30, 2014

	Realized  Gain on		Net Change in Unrealized (Loss)
Primary Underlying Risk	Derivative Instruments		Gain on Derivative Instruments
Commodity price
Corn futures contracts	$	3,892,458	$	(4,845,687	)
Natural gas futures contracts		283,150		(17,330	)
WTI crude oil futures contracts		93,280		113,760
Soybean futures contracts		242,575		14,663
Sugar futures contracts		3,383		188,664
Wheat futures contracts		585,988		(1,120,237	)
Total commodity futures contracts	$	5,100,834	$	(5,666,167	)

Six months ended June 30, 2013

	Realized  Loss on			Net Change in Unrealized (Loss)
Primary Underlying Risk	Derivative Instruments			Gain on Derivative Instruments
Commodity price
Corn futures contracts	$	(3,680,613	)	$	(609,950	)
Natural gas futures contracts		(99,059	)		64,509
WTI crude oil futures contracts		(87,130	)		67,790
Soybean futures contracts		(174,925	)		153,563
Sugar futures contracts		(285.118	)		(98,033	)
Wheat futures contracts		(756,375	)		(516,987	)
Total commodity futures contracts	$	(5,083,220	)	$	(939,108	)

Volume of Derivative Activities

The notional amounts and number of contracts categorized by primary underlying risk are included in the schedule of investments as of June 30, 2014 and December 31, 2013.