Disclosure Document of

AgYield LLC

AgYield LLC

1 Tower Lane, Suite 1750

Oak Brook Terrace, IL 60181

Telephone:  (855) 266-6241

Facsimile:  (312) 786-4227

Email:  info@agyield.com 

THE COMMODITY FUTURES TRADING COMMISSION HAS NOT PASSED UPON THE MERITS OF PARTICIPATING IN THIS TRADING PROGRAM NOR HAS THE COMMISSION PASSED ON THE ADEQUACY OR ACCURACY OF THIS DISCLOSURE DOCUMENT

AgYield LLC first intends to use this Disclosure Document beginning on

April 23, 2020

RISK DISCLOSURE STATEMENT

THE RISK OF LOSS IN TRADING COMMODITY INTERESTS CAN BE SUBSTANTIAL. YOU SHOULD THEREFORE CAREFULLY CONSIDER WHETHER SUCH TRADING IS SUITABLE FOR YOU IN LIGHT OF YOUR FINANCIAL CONDITION.  IN CONSIDERING WHETHER TO TRADE OR TO AUTHORIZE SOMEONE ELSE TO TRADE FOR YOU, YOU SHOULD BE AWARE OF THE FOLLOWING:

IF YOU PURCHASE A COMMODITY OPTION YOU MAY SUSTAIN A TOTAL LOSS OF THE PREMIUM AND OF ALL TRANSACTION COSTS.

IF YOU PURCHASE OR SELL A COMMODITY FUTURES CONTRACT OR SELL A COMMODITY OPTION OR ENGAGE IN OFF-EXCHANGE FOREIGN CURRENCY TRADING YOU MAY SUSTAIN A TOTAL LOSS OF THE INITIAL MARGIN FUNDS OR SECURITY DEPOSIT AND ANY ADDITIONAL FUNDS THAT YOU DEPOSIT WITH YOUR BROKER TO ESTABLISH OR MAINTAIN YOUR POSITION.  IF THE MARKET MOVES AGAINST YOUR POSITION, YOU MAY BE CALLED UPON BY YOUR BROKER TO DEPOSIT A SUBSTANTIAL AMOUNT OF ADDITIONAL MARGIN FUNDS, ON SHORT NOTICE, IN ORDER TO MAINTAIN YOUR POSITION.  IF YOU DO NOT PROVIDE THE REQUESTED FUNDS WITHIN THE PRESCRIBED TIME, YOUR POSITION MAY BE LIQUIDATED AT A LOSS, AND YOU WILL BE LIABLE FOR ANY RESULTING DEFICIT IN YOUR ACCOUNT.

UNDER CERTAIN MARKET CONDITIONS, YOU MAY FIND IT DIFFICULT OR IMPOSSIBLE TO LIQUIDATE A POSITION.  THIS CAN OCCUR, FOR EXAMPLE, WHEN THE MARKET MAKES A “LIMIT MOVE.”

THE PLACEMENT OF CONTINGENT ORDERS BY YOU OR YOUR TRADING ADVISOR, SUCH AS A “STOP-LOSS” OR “STOP-LIMIT” ORDER, WILL NOT NECESSARILY LIMIT YOUR LOSSES TO THE INTENDED AMOUNTS, SINCE MARKET CONDITIONS MAY MAKE IT IMPOSSIBLE TO EXECUTE SUCH ORDERS.

A “SPREAD” POSITION MAY NOT BE LESS RISKY THAN A SIMPLE “LONG” OR “SHORT” POSITION.

THE HIGH DEGREE OF LEVERAGE THAT IS OFTEN OBTAINABLE IN COMMODITY INTEREST TRADING CAN WORK AGAINST YOU AS WELL AS FOR YOU.  THE USE OF LEVERAGE CAN LEAD TO LARGE LOSSES AS WELL AS GAINS.

IN SOME CASES, MANAGED COMMODITY ACCOUNTS ARE SUBJECT TO SUBSTANTIAL CHARGES FOR MANAGEMENT AND ADVISORY FEES.  IT MAY BE NECESSARY FOR THOSE ACCOUNTS THAT ARE SUBJECT TO THESE CHARGES TO MAKE SUBSTANTIAL TRADING PROFITS TO AVOID DEPLETION OR EXHAUSTION OF THEIR ASSETS.  THIS DISCLOSURE DOCUMENT CONTAINS, AT PAGE 8, A COMPLETE DESCRIPTION OF EACH FEE TO BE CHARGED TO YOUR ACCOUNT BY THE COMMODITY TRADING ADVISOR.

THIS BRIEF STATEMENT CANNOT DISCLOSE ALL THE RISKS AND OTHER SIGNIFICANT ASPECTS OF THE COMMODITY INTEREST MARKETS.  YOU SHOULD THEREFORE CAREFULLY STUDY THIS DISCLOSURE DOCUMENT AND COMMODITY INTEREST TRADING BEFORE YOU TRADE, INCLUDING THE DESCRIPTION OF THE PRINCIPAL RISK FACTORS OF THIS INVESTMENT, AT PAGE 8.

THIS COMMODITY TRADING ADVISOR IS PROHIBITED BY LAW FROM ACCEPTING FUNDS IN THE TRADING ADVISOR’S NAME FROM A CLIENT FOR TRADING COMMODITY INTERESTS.  YOU MUST PLACE ALL FUNDS FOR TRADING IN THIS TRADING PROGRAM DIRECTLY WITH A FUTURES COMMISSION MERCHANT OR RETAIL FOREIGN EXCHANGE DEALER, AS APPLICABLE.

Table of Contents

Introduction. 1

The Company. 1

Principals of the Company. 2

Trading Programs. 4

Risk Advisory Program.. 5

Performance Pricing Program.. 5

Third Party Contracts Program.. 6

Third Party MBP Program.. 7

Fees. 8

Principal Risk Factors. 8

Trading for Own Account 11

Conflicts of Interest 11

Litigation. 12

Acknowledgement of Receipt of This Disclosure Document 12

Supplemental Information and Other Material Information. 12

Performance History. 12

Introduction

AgYield LLC (“AgYield” or the “Company”) is a limited liability company organized under the laws of Illinois.  The Company has been registered with the Commodity Futures Trading Commission (“CFTC”) as a Commodity Trading Advisor (“CTA”) since August 8, 2018.  AgYield became a member of the National Futures Association (“NFA”) on October 8, 2018.  The main business address and the main business telephone number of the Company is provided below.

AgYield LLC

1 Tower Lane, Suite 1750

Oak Brook Terrace, IL 60181

Telephone:  (855) 266-6241

The Company first intends to use this Disclosure Document beginning on April 23, 2020.

The Company currently offers clients the following four programs, each described herein:

• (1) Risk Advisory Program
• (2) Performance Pricing Program
• (3) Third Party Contracts Program
• (4) Third Party MBP Program

Of the four programs offered, the Third Party MBP Program is the only one in which the Company would take discretion over customer accounts.

The Company

AgYield is an Illinois limited liability company formed in February 2010, which operated under the name Ammo LLC until September 2012.  Since its inception, AgYield has served customers primarily in the agriculture and farming industries who are located in the United States.  The Company’s primary business lines have been, and continue to be, providing customers with: financial advisory services; revenue management solutions; and software programs used to track gains and losses, test performance, and value operating costs.  The Company has been registered as a CTA since August 8, 2018.

AgYield is a wholly owned subsidiary of Ag Integrations LLC (“Ag Integrations”).  Ag Integrations, through its subsidiaries AgYield and EHedger LLC (“EHedger”), provides a farm revenue management platform along with brokerage services.  EHedger is registered with the CFTC as an introducing broker (“IB”) and as a CTA, is an NFA Member, and is an approved Swap Firm.  See page 11 of this Disclosure Document for disclosures regarding conflicts of interest.

The Company does not require clients to have their accounts introduced by a specific IB.  Clients are free to choose an IB, if an IB will be used.

The Company does not require clients to maintain their accounts with a specific futures commission merchant (“FCM”) or use a specific counterparty.  Clients are free to choose an FCM or counterparty, if an FCM or counterparty will be used.

See page 12 of this Disclosure Document for disclosures regarding performance history.

Principals of the Company

The following are Principals of the Company due to their positions with the Company:

• Justin E. Kelly
• Michael A. Brinati
• Michael J. Brinati
• David Alden Frymire
• Jack R. Frymire

The following are Principals of the Company with 10% or more financial interest in the Company:

• Ag Integrations LLC, which is an Illinois limited liability company managed by Justin E. Kelly, Michael A. Brinati, Michael J. Brinati, David Alden Frymire, and Jack R. Frymire.
• Justin E. Kelly
• Michael A. Brinati
• David Alden Frymire
• Jack R. Frymire

Provided below is the business background of the Principals of the Company who participate in making trading or operational decisions for the Company or who supervise such persons.

Justin E. Kelly

President, AgYield LLC

President, EHedger LLC

Justin has been with AgYield since February 2010 and currently oversees all day-to-day aspects of the business.  In addition to his many operational responsibilities, Justin plays a major role in both strategy and software development.  He also manages associated entities and staff of Ag Integrations, including EHedger and AgYield.  Justin designed the first version of AgYield’s software platform, and he continues to manage the developmental stages and key advancements of the software.  In addition to serving as President of AgYield, Justin also serves in a similar capacity as President of EHedger, and has been with EHedger since February 2010.

With respect to AgYield, Justin:

• has been a registered AP since August 8, 2018
• has an application pending to be an NFA Associate Member
• has been a listed Principal since August 7, 2018

With respect to EHedger, Justin:

• has been a registered AP since August 8, 2018
• has been an approved Swap AP since August 8, 2018
• has been an NFA Associate Member since August 8, 2018
• has been a listed Principal since June 20, 2007

Justin attended Purdue University and graduated with a Bachelor of Science degree in Agribusiness Management in 2002.

Michael A. Brinati

Vice President, AgYield LLC

Vice President, EHedger LLC

Michael has been with AgYield since September 2012 and currently manages day-to-day operations, including software development, business development, and sales operations.  In addition to serving as Vice President of AgYield, Michael also serves in a similar capacity as Vice President of EHedger, and has been with EHedger since September 2012.

With respect to AgYield, Michael:

• has been a registered AP since August 8, 2018
• has been an NFA Associate Member since October 8, 2018
• has been a listed Principal since August 7, 2018

With respect to EHedger, Michael:

• has been a registered AP since August 8, 2018
• has been an NFA Associate Member since August 8, 2018
• has been a listed Principal since March 30, 2015

In addition, Michael has been a registered floor broker since October 12, 2010, and has trading privileges granted at the Chicago Board of Trade (“CBOT”).

Michael graduated from the University of Phoenix in 2013 with a Business Management degree.

Michael J. Brinati

Principal, AgYield LLC

Michael has been with AgYield since February 2010.  He participates as a member of the advisory board making strategic and operational decisions for AgYield.  Concurrently with his position at AgYield, Michael also works for EHedger in a similar capacity, and has been with EHedger since February 2010.

With respect to AgYield, Michael:

• has been a listed Principal since August 7, 2018

With respect to EHedger, Michael:

• has been a listed Principal since December 15, 1999

In addition, Michael has been a registered floor broker since February 5, 1985, and has trading privileges granted at CBOT.

Michael holds a Bachelor of Science degree from Northern Illinois University, which he received in 1983.

David Alden Frymire

Principal, AgYield LLC

David has been with AgYield since February 2010.  He participates as a member of the advisory board making strategic and operational decisions for AgYield.  Concurrently with his position at AgYield, David also works for EHedger in a similar capacity, and has been with EHedger since February 2010.

With respect to AgYield, David:

• has been a listed Principal since August 7, 2018

With respect to EHedger, David:

• has been a listed Principal since December 15, 1999

In addition, David has been a registered floor broker since November 23, 1987, and has trading privileges granted at CBOT.

David graduated from Iowa State University in 1986 with an Agribusiness degree.

Jack R. Frymire

Principal, AgYield LLC

Jack has been with AgYield since February 2010.  Jack participates as a member of the advisory board making strategic and operational decisions for AgYield.  Concurrently with his position at AgYield, Jack also works for EHedger in a similar capacity, and has been with EHedger since February 2010.

With respect to AgYield, Jack:

• has been a listed Principal since August 7, 2018

With respect to EHedger, Jack:

• has been a registered AP since December 15, 1999
• has been an NFA Associate Member since December 15, 1999
• has been a listed Principal since December 15, 1999

In addition, Jack has been a registered floor broker since April 24, 1986, and has trading privileges granted at CBOT.

Jack graduated from Iowa State University in 1986 with an Agribusiness degree.

Trading Programs

The Company will provide advisory services to its clients on the use of derivatives to manage price risks associated with their business.  The Company offers client services in the context of four programs, each described below.  A client may participate in one or all of the programs.

Generally, the Company will provide commodity trading advice based on, or tailored to, the commodity interest positions, cash market positions, or other circumstances and characteristics of a particular client.  Recommendations provided to clients are based on commonly recognized best practices for commercial risk mitigation and may also take into account the geographic region, supply situation, and other risk factors unique to the client.  The Company makes no guarantee that its services will result in a profit to its clients and makes no guarantee that its services will prevent its clients from taking losses.  While the Company’s commodity trading advice is tailored to each client, the Company does not trade commodity interests on behalf of its clients under the Risk Advisory Program, the Performance Pricing Program, or the Third Party Contracts Program.  However, the Company does trade commodity interests on behalf of its customers under the Third Party MBP Program.

Risk Advisory Program

Under the Risk Advisory Program, clients will receive customized advice unique to each of their individual circumstances.  The Risk Advisory Program utilizes the AgYield Revenue Manager, which is a web-based software program.  With the AgYield Revenue Manager, clients are able to track daily gains and losses, test performance, value operating costs, and identify any holes in their marketing plan.

In addition, AgYield utilizes Athena, which is an artificial intelligence program that allows clients to define their profitability goals, risk parameters, and capital constraints in order to create their ideal marketing plan.  This allows growers to take a proactive approach to managing their farm’s risk and profitability.  Athena searches trillions of combinations to find efficient profitability solutions.  Athena will constantly assess changing market conditions and adapt strategies to satisfy farm marketing goals.

Athena will provide tailored recommendations to the Company’s clients.  Clients will not be obligated to act on any recommendations.  With the exception of the Third Party MBP Program, the Company currently does not make any derivatives trades on behalf of its clients.

Performance Pricing Program

The Company offers the Performance Pricing Program to clients to assist them with managing commodity price risks principally associated with their agricultural production.  In the Performance Pricing Program, each client may agree to sell a volume of commodities to AgYield.  The price paid by AgYield for the commodity will reflect, in part, pricing that AgYield obtains for itself in respect to one or more components of the price for such commodity.

The price paid by AgYield for any commodity sold to it by a client primarily has two components.  The first component is the price for the unprocessed commodity.  In the agricultural industry, market participants often refer to this price as the “futures price” as typically the price of such unprocessed commodity is set by reference to an available price for a futures contract for such unprocessed commodity or a similar product.  The second component is basis, which is generally defined by the difference between the prevailing market price at a given location and the applicable “futures price.”

AgYield will obtain the futures price based upon its own trading without any customization (the “Optimized Price”).  The Optimized Price is determined on or prior to the time that the client delivers the commodity in accordance with the Transaction Documents (defined below).  The Performance Pricing Program provides AgYield’s clients with the benefits of AgYield’s experience in the trading markets.  In a sense, AgYield can pass its futures price through to the client as the Optimized Price.  In certain cases, AgYield may retain a portion of the excess of the Optimized Price over the price of the related futures contract used by a delivery location to price commodities that it has purchased.

A client may agree with AgYield to a specified amount in respect of basis for a particular sale of commodities to AgYield.  However, AgYield will allow clients enrolled in the Performance Pricing Program to determine basis by permitting the client to deliver the commodity for a particular transaction to one or more agreed upon delivery points, most often to recognized elevator or other storage facilities.  In such cases, the basis will equal the difference paid by the party receiving the commodity and the Optimized Price.  The client may consult with AgYield regarding which delivery point might offer the most advantageous basis price.  AgYield will have the option to select the delivery location and set the basis at any time so long as the client has not already done so.

The Performance Pricing Program is designed only to permit a client to manage pricing risks in connection with the sale of commodities.  Accordingly, AgYield limits participation by a client in the Performance Pricing Programs by the volume amount of commodity products that AgYield reasonably expects to purchase from the client.  AgYield may limit a client’s use of the Performance Pricing Program to a volume amount that is less than the volume of its expected commodity purchase.  In addition, AgYield will not commit to purchase under the program more than 50% of any single crop of the client.

To enroll in the Performance Pricing Program, each client will enter into a performance and advisory agreement with AgYield.  This agreement will establish certain rights and responsibilities in the Performance Pricing Program as between the client and AgYield.  Two separate documents establish the economic and legal terms applicable to any sale or purchase of commodities under the Performance Pricing Program:  (a) the general terms and conditions for any purchase and sale transaction; and (b) a purchase confirmation that sets out specific terms to determine the Optimized Price (collectively “Transaction Documents”).

The customer has no ability to direct or control AgYield’s trading to achieve the Optimized Price.

In relation to the Optimized Price, AgYield may trade a variety of derivatives and has the authority to engage in transactions that would result in the physical delivery of commodities.  Such derivatives include, without limitation, (i) exchange listed products, such as futures, options on futures, exchange listed swaps and options on exchange listed swaps and (ii) over-the-counter swaps, options, swaptions, financially-settling forwards and contracts for differences.

The client has no requirements to provide premium payments or deliver collateral support in respect of AgYield’s trading relative to the Performance Pricing Program.  The client will not be responsible for any costs, fees, losses, or margin payment related to such trading.

Third Party Contracts Program

Clients may enter into forward contracts for the purchase or sale of grain to or from third parties (each, a “Grain Counterparty”), which Grain Counterparties offer pricing terms that permit clients to manage commodity price risk (such contracts “Third Party Contracts”).  As of March 2019, AgYield provides the Third Party Contracts Program to clients to assist them with managing commodity price risk associated with commodities sold under such Third Party Contracts.  AgYield may provide clients with recommendations regarding the pricing provisions of such contracts.   With written authorization delivered by a client to the Grain Counterparty, the client may authorize AgYield to determine the pricing terms with the Grain Counterparty directly.  In this manner, AgYield manages the pricing for the client.  However, pricing provisions regarding basis are set between the client and the Grain Counterparty.

The client and the Grain Counterparty negotiate and enter in the Third Party Contracts independently of AgYield.  Any costs, fees, losses, or credit support arrangements associated with transactions between the client and the Grain Counterparty are set forth in the Third Party Contract and are exclusively between the client and the Grain Counterparty.  The customer and AgYield will enter into a separate advisory agreement for services in connection with the Third Party Contracts Program, which agreement provides for fees payable to AgYield.  Such fees are typically measured by the number of bushels or other commodity unit transacted under the Third Party Contract.

If one or more clients have authorized AgYield to make pricing decisions in respect of Third Party Contracts with the same Grain Counterparty, AgYield will often make pricing decisions for its clients in a uniform manner across all such Third Party Contracts.

Clients will not be obligated to act on any recommendations.  When AgYield has authorization to provide pricing instructions directly to the Grain Counterparty, the Grain Counterparty is not obligated to accept such pricing instruction.   If the Grain Counterparty accepts such pricing instructions, then the pricing instructions will be binding upon the client.

AgYield will not have the authority to execute derivatives transactions on behalf of the client or the Grain Counterparty.  Accordingly, if AgYield were to make a pricing decision with respect to a Third Party Contract, it is the providence of the Grain Counterparty on how to address any resulting commodity price risk it incurs in respect of such pricing decision.

Third Party MBP Program

AgYield also directs trading of derivatives to assist Grain Counterparties in offering structured pricing on grain purchased from a group of producers under a managed bushels program.  In the managed bushel programs, the Grain Counterparties enter into separate forward contracts for the purchase or sale of grain from producers (each, a “Managed Bushel Contract”) and offer a structured price for certain quantities of commodities deliverable in a defined time period.  In the Third Party MBP Program, the Grain Counterparty provides AgYield with a power of attorney to trade its account to achieve a return that, when coupled with the prevailing cash price at delivery under the Managed Bushel Contracts, produces a structured price paid to the producers.

Managed Bushel Contracts are organized in series.  In general, the Managed Bushel Contracts for a series relate to only a few months of trading as they correspond to regular seasons for the planting and production of crops.  Each series is considered a separate sub-program for regulatory purposes.  Each sub-program since AgYield began directing accounts under the Third Party MBP Program is identified along with the related performance data starting at page 12.

The producer and the Grain Counterparty negotiate and enter in the Managed Bushel Contracts independently of AgYield.  Any costs, fees, losses, or credit support arrangements associated with transactions between the client and the Grain Counterparty are set forth in the Managed Bushel Contract and are exclusively between the producer and the Grain Counterparty.

The Grain Counterparty and AgYield will enter into a separate advisory agreement for services in connection with the Third Party MBP Program, which agreement provides for fees payable to AgYield.  Such fees are typically measured by the number of bushels or other commodity unit transacted under the Third Party Contract.

AgYield will direct derivatives trading in a manner tailored to each of its Grain Counterparties under the Third Party MBP Program, provided that the trading will relate to the related group of Managed Bushel Contracts in any sub-program.

Fees

The Company charges a variety of different fees depending upon the specific services requested by the client.

Under the Risk Advisory Program, fees are negotiated with clients on a case-by-case basis, generally as a fixed quarterly fee.  Generally, such fees fall within a range of $5,000 – $25,000 annually.  The Company will invoice clients on a quarterly basis, and clients must remit payment under an invoice within 10 business days.

Under the Performance Pricing Program, the Transaction Documents may provide for a transaction fee to cover any advisory services provided by the Company with respect to a transaction.  Generally, the fee will be determined by reference to a fixed amount for each unit of measure of a commodity transacted.  For example, the fee might be determined as $0.02 for each bushel of wheat transacted, multiplied by the total amount of wheat transactions.  The Company will determine the fee within 10 business days of the settlement of the transaction and invoice the applicable client as of the date of such determination. Clients must remit payment under an invoice within 10 business days.  There is no separate fee for participation in the Performance Pricing Program if no commodities are transacted.

Under the Third Party Contracts Program or the Third Party MBP Program, fees are typically determined by multiplying a fee rate by the number of bushels or other commodity unit transacted under the Third Party Contract or Managed Bushels Contract.  Typically, such fee rate is between $0.03 and $0.12 per unit.  The Company will invoice clients on a quarterly basis, and clients must remit payment under an invoice within 10 business days.

The Company will not receive any commission in respect of transactions that are executed through EHedger.

Principal Risk Factors

Trading futures and options involves a high degree of risk.  The risks associated with trading futures and options are varied, and the risk of loss can be substantial.  Substantial loss can occur because loss might not be limited to the initial investment.  Therefore, you should carefully assess whether such trading is suitable for you in light of your financial condition.

As discussed further below, principal risks associated with trading futures and options include risks due to volatility, leverage, and liquidity.  Although the specific risks associated with a particular futures or options contract depend on the terms of the transaction and the circumstances, all futures and options transactions involve some risk.  This Disclosure Document does not purport to discuss all of the risks concerning trading in futures and options.

Futures and Options Trading Is Volatile.  Futures and options prices are highly volatile.  Movements in price for such instruments are influenced by factors that include:  fluctuation of supply and demand; weather and climate; agriculture, trade, fiscal, monetary, and exchange control programs and policies of governments; national and international political and economic events and policies; changes of national and international interest rates and rates of inflation; changes with respect to currency valuation; blights; changes in market participant behavior; and emotions of the marketplace.  The Company cannot control these factors, and the Company cannot give any assurance that the Company’s trading advice will result in profitable trades for you or that you will not incur substantial losses.

Futures and Options Trading Is Highly Leveraged.  Because of the low margin deposits normally required in futures contract trading (typically between 2% and 15% of the value of the contract purchased or sold), positions are typically acquired on a leveraged basis with the result that a small movement in the price of a futures contract may result in a large profit or loss to an account.  For example, if at the time of purchase 10% of the price of a contract is deposited as margin, a 10% decrease in the price of the contract would, if the contract is then closed out, result in a total loss of the margin deposit before any deduction for brokerage commissions.  A decrease of more than 10% would result in a loss of more than the total margin deposit.  Accordingly, a relatively small price movement in a contract may result in immediate and substantial losses to the investor.  Like other leveraged investments, any trade may result in losses in excess of the amount invested.  When the market value of a particular open position changes to a point where the margin on deposit does not satisfy the applicable maintenance margin requirement imposed by the client’s FCM, the client will receive a margin call from the FCM.  If the client does not satisfy the margin call within a reasonable time (which may be as brief as one hour), the FCM might close out the client’s position.

With respect to options, a buyer of an option risks losing the entire purchase price of the option as well as any associated fees and commissions.  For a seller of an option, however, there is no limit to potential loss.

Even risk management plans designed to hedge rather than speculate may result in significant losses.  Only clients who understand and are capable of taking the risks of leveraged trading highly volatile and concentrated markets should consider trading pursuant to the Company’s recommendations.

Futures and Options Markets May Be Illiquid.  Futures and options markets may be illiquid.  A futures exchange may impose “daily limits” on the amount by which the price of futures contracts traded on such exchange may vary during a single day.  Daily limits prevent trades from being executed during a given trading day at a price above or below the daily limit.  Once the price of a futures contract has moved to the limit price, it may be difficult, costly, or impossible to liquidate a position.  Such limits could prevent a market participant from promptly liquidating unfavorable positions and restrict its ability to exercise or offset futures options.  In addition, market participants on futures exchanges may be unable to execute trades at favorable prices if the liquidity of the market is not adequate.  It is also possible for an exchange or the CFTC to suspend trading in a particular contract, order immediate settlement of a particular contract, or order that trading in a particular contract be conducted for liquidation only.  In any of these events, it may be impossible for a market participant on a futures exchange to achieve the price desired.

Market Risk.  In general, market risk is the possibility of losses in positions arising from movements in market prices.  For futures or options, a key driver in market risk is from fluctuations in price with respect to the underlying commodity (e.g., wheat).  As such, you should be familiar with the market for the relevant underlying commodity.

Operational Risk.  Trading futures and options will subject you to certain regulatory requirements and will expose you to additional legal risks.  Complying with applicable regulations may impose substantial costs.  Penalties for violating regulatory requirements may be extensive.  Note, however, that the Company does not provide any legal advice.

Incomplete or Inaccurate Information.  The Company will not necessarily have access to all of the market information available.  Further, although the Company will use information which it reasonably believes to be reliable, the information on which the Company bases its recommendations may be incomplete or inaccurate.

Failure of an FCM.  Under CFTC regulations, FCMs are required to maintain a client’s assets in a segregated account.  If a client’s FCM fails to do so, the client may be subject to a risk of loss of its funds on deposit with its FCM in the event of its bankruptcy.  In addition, under certain circumstances, such as the inability of another client of the FCM or the FCM itself to satisfy substantial deficiencies in such other client’s account, a client may be subject to a risk of loss of its funds on deposit with its FCM, even if such funds are properly segregated.  In the case of any such bankruptcy or client loss, a client might recover, even in respect of property specifically traceable to the client, only a pro rata share, which may be zero, of all property available for distribution to all of the FCM’s clients. 

Transactions with Delivery of Commodities.  The Performance Pricing Program entails the purchase and sale of physical commodities, which involves certain risks associated with a bilateral transaction that settles with the physical delivery of a commodity.  These risks can be extremely complex and include:  (1) credit risks (the exposure to the possibility of loss resulting from a counterparty’s failure to meet its financial obligations); (2) market risk (adverse movements in the price of a financial asset or commodity); (3) legal risks (the characterization of a transaction or a party’s legal capacity to enter into it could render the financial contract unenforceable, and the insolvency or bankruptcy of a counterparty could preempt otherwise enforceable contract rights); (4) operational risk (inadequate controls, deficient procedures, human error, system failure, or fraud); (5) documentation risk (exposure to losses resulting from inadequate documentation); (6) liquidity risk (exposure to losses created by inability prematurely to terminate the purchase and sale transaction); (7) system risk (the risk that financial or operational difficulties in one institution or a major market disruption will cause uncontrollable harm to the markets for the relevant commodities); (8) concentration risk (exposure to losses from the concentration of closely related risks, such as exposure to a particular industry or exposure linked to a particular entity); (9) settlement risk (the risk faced when one party to a transaction has performed its obligations under a contract but has not yet received value from its counterparty); (10) risk of loss (the risk that the commodities are lost, destroyed, stolen, or tainted); and (11) transportation risk (the risk that the purchased commodities cannot be delivered because no carrier has the ability to transport the goods).

Trading for Own Account

The Company does not currently engage in trading commodity interests for its own account.  However, its Principals may take or hold positions in commodity interest transactions.  Such positions may be consistent with, or contrary to, the advice that the Company provides to its clients, subject to any limitations and conditions under applicable law.  The Company’s Principals will not trade ahead of, or against, client accounts knowingly or intentionally; however, such trading may occur unintentionally and, as such, proprietary accounts may trade ahead of or against client accounts and may receive preferential treatment.  Clients will not be permitted to inspect the records of the Company’s or its Principals’ trades or any written policies related to such trades.

Conflicts of Interest

The Company and its affiliate, EHedger, guide the trading of other clients and engage in other business activities.  As such, the Company and EHedger may have conflicts of interest with respect to allocation of time, services, and resources.

The guidance provided by the Company or EHedger to other clients may differ from or may be similar to the strategy provided to you.  As noted above, the Company’s Principals may take or hold positions in commodity interest transactions.  Further, the Company’s affiliates and employees may take or hold positions in commodity interest transactions.  Such positions may be consistent with, or contrary to, the advice that the Company provides to its clients, subject to any limitations and conditions under applicable law.  The Company, its Principals, affiliates, and employees will not trade ahead of, or against, client accounts knowingly or intentionally; however, such trading may occur unintentionally and, as such, proprietary accounts may trade ahead of or against client accounts and may receive preferential treatment.

The Company is affiliated with EHedger and frequently recommends clients execute futures through EHedger.  While the Company does not receive any commissions or other incentives to recommend trading through EHedger, its corporate family is enriched when clients of the Company do execute trades through EHedger.

The Company, EHedger, and their Principals, officers, employees, agents, and affiliates may not be liable to clients for errors in judgment or other acts or omissions not amounting to gross negligence or reckless or intentional misconduct, as a consequence of an indemnification provision included in the advisory agreement.  Clients may have more limited rights of action than they would absent such a provision.

The preceding list of risk factors and conflicts of interest does not purport to be a complete explanation of the risks and conflicts associated with the Risk Advisory Program or the Performance Pricing Program.  Each prospective client that intends to utilize the Risk Advisory Program or the Performance Pricing Program should carefully read this Disclosure Document, including the Risk Disclosure Statement provided after the cover page of this Disclosure Document, with particular care and give due consideration to the risk factors and conflicts of interest described herein.

Litigation

Neither Company nor any of its Principals have been a party to any material administrative, civil, or criminal litigation in the past 5 years.

Acknowledgement of Receipt of This Disclosure Document

Before the Company can enter into an agreement with a prospective client to guide the prospective client’s commodity interest trading, the Company must first receive from the prospective client an acknowledgement that is signed and dated confirming that the prospective client has received a copy of this Disclosure Document.  This required acknowledgement from the prospective client can be fulfilled by completing and submitting to the Company the form entitled Acknowledgement of Receipt of the Disclosure Document, which is provided on the last page of this Disclosure Document.

Supplemental Information and Other Material Information

The Company operates a number of business lines, which include:

• CTA Services – Derivatives trading advice to the agriculture and farming industries.

• Software Program Services – Software programs used to track gains and losses, test performance, and value operating costs.

The Company’s affiliates also offer services, including:

• IB Services – IB services are offered through EHedger.
• CTA Services – CTA services are offered through EHedger.

Performance History

This section describes AgYield’s performance under the Third Party MBP Program in managing commodity price risk associated with commodities transacted with Grain Counterparties under Third Party Contracts.  Performance under any client’s particular Third Party Contract may differ based on different levels of fees, different degrees of leverage used, and other differences.

AgYield has not offered the Third Party MBP Program for more than a year.  All performance information is set forth in capsule format. However, full performance records are available without charge upon request to AgYield.

To the best of AgYield’s knowledge, no brokerage or similar commission are payable by clients under Third Party Contracts.

PAST PERFORMANCE IS NOT NECESSARILY INDICATIVE OF FUTURE RESULTS.  NO REPRESENTATION IS MADE THAT ANY ACCOUNT WILL OR IS LIKELY TO ACHIEVE RESULTS SIMILAR TO THOSE SHOWN OR TO AVOID SUBSTANTIAL LOSSES. FUTURES TRADING IS SPECULATIVE AND INVOLVES SUBSTANTIAL RISK OF LOSS.

AgYield LLC

Third Party MBP Program

Capsule Performance Summary

Period November 18, 2019 to March 31, 2020

PAST PERFORMANCE IS NOT NECESSARILY INDICATIVE OF FUTURE RESULTS

Draw-down: Losses experienced by the trading program over a specified period.

AgYield LLC

Third Party MBP Program

Capsule Performance Summary

Period November 18, 2019 to March 31, 2020

PAST PERFORMANCE IS NOT NECESSARILY INDICATIVE OF FUTURE RESULTS

Draw-down: Losses experienced by the trading program over a specified period.

AgYield LLC

Third Party MBP Program

Capsule Performance Summary

Period November 18, 2019 to March 31, 2020

PAST PERFORMANCE IS NOT NECESSARILY INDICATIVE OF FUTURE RESULTS

Draw-down: Losses experienced by the trading program over a specified period.

AgYield LLC

Third Party MBP Program

Capsule Performance Summary

Period March 15, 2019 to October 1, 2019

PAST PERFORMANCE IS NOT NECESSARILY INDICATIVE OF FUTURE RESULTS

Draw-down: Losses experienced by the trading program over a specified period.

AgYield LLC

Third Party MBP Program

Capsule Performance Summary

Period March 15, 2019 to October 1, 2019

PAST PERFORMANCE IS NOT NECESSARILY INDICATIVE OF FUTURE RESULTS

Draw-down: Losses experienced by the trading program over a specified period.

AgYield LLC

Third Party MBP Program

Capsule Performance Summary

Period March 15, 2019 to October 1, 2019

PAST PERFORMANCE IS NOT NECESSARILY INDICATIVE OF FUTURE RESULTS

Draw-down: Losses experienced by the trading program over a specified period.

AgYield LLC

Third Party MBP Program

Capsule Performance Summary

Period March 15, 2019 to October 1, 2019

PAST PERFORMANCE IS NOT NECESSARILY INDICATIVE OF FUTURE RESULTS

Draw-down: Losses experienced by the trading program over a specified period.

[Last Performance Disclosure]