<PAGE>   1


================================================================================


                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                    FORM 10-K

                  ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D)
                     OF THE SECURITIES EXCHANGE ACT OF 1934

                   For the fiscal year ended December 31, 1998

                         Commission file number 33-94050

                                CERES FUND, L.P.
                 (Name of small business issuer in its charter)

           TENNESSEE                                   62-1154702
(State or other jurisdiction of            (I.R.S. Employer Identification No.)
incorporation or organization)

                        C/O RANDELL COMMODITY CORPORATION
                            889 RIDGE LAKE BOULEVARD
                            MEMPHIS, TENNESSEE 38120
              (Address of principal executive offices and Zip Code)

                  Registrant's telephone number (901) 766-4590

Securities registered under Section 12(b) of the Exchange Act:  NONE
Securities registered under Section 12(g) of the Exchange Act: NONE

         Check whether the issuer (1) filed all reports required to be filed by
Section 13 or 15(d) of the Exchange Act during the past 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 X  No
                                                                      ---   ----

         The registrant is a limited partnership and, accordingly, has no voting
stock held by non-affiliates or otherwise.

         Incorporation by Reference: Registrant's Registration Statement
effective March 9, 1991 and the Prospectus contained therein into Part IV, Item
14 (a)(3) and Supplement No. 1 dated October 1, 1992, thereto, post effective
Amendment No. 1 dated April 26, 1991, effective April 30, 1991, post effective
Amendment No. 2 dated November 12, 1991, effective November 15, 1992, post
effective Amendment No. 3 dated March 31, 1992, effective April 7, 1992,
Supplement No. 3 dated June 30, 1992, Supplement No. 4 dated November 30, 1992,
post effective Amendment No. 4 dated April 30, 1993, effective May 19, 1993,
post effective Amendment No. 5 dated October 16, 1996, effective October 31,
1996, post effective Amendment dated August 25, 1997, effective September 2,
1997, and post effective amendment dated May 30, 1998, effective June 8, 1998.

================================================================================

<PAGE>   2





                                     PART I

ITEM 1.

(A) BUSINESS

         Ceres Fund, L.P. (the "Partnership") is a limited partnership organized
on September 19, 1990, pursuant to a Limited Partnership Agreement (the "Limited
Partnership Agreement") under the Uniform Limited Partnership Act of the State
of Tennessee and funded through an offering of limited partnership units (the
"Units"). The Partnership engages in speculative trading of commodity futures
contracts, forward contracts, commodity options and other interests in
commodities including, without limitation futures contracts and options on
financial instruments, physical commodities and stock indices on organized
exchanges in the U.S. and abroad.

         The initial offering to the public of 100,000 Units was closed on
November 29, 1991, and trading began December 1, 1991. Following the
commencement of trading, the Partnership continued the offering of Units,
issuing Units and fractions thereof at the Average Net Asset Value as of the
last business day of the month during which the purchaser's subscription was
received. As of the close of the initial offering on November 29, 1991,
13,471.6805 Units had been sold. As of December 31, 1993, a total of 38,234.7916
Units had been sold of which a total of 24,122.7011 were outstanding. As of
December 31, 1994, a total of 40,552.2246 Units had been sold of which a total
of 22,679.4144 were outstanding. As of December 31, 1995, a total of 43,256.2273
Units had been sold of which a total of 20,341.7718 were outstanding. As of
December 31, 1996, a total of 43,650.9560 had been sold of which a total of
17,938.6369 were outstanding. As of December 31, 1997, a total of 57,203.0471
units had been sold of which a total of 31,797.3173 were outstanding. As of
December 31, 1998, a total of 61,556.1411 units had been sold of which a total
of 34,206.8517 were outstanding. The Prospectus is regularly updated and Units
continue to be offered to the public.

         The offering was registered under the Securities Act of 1933, as
amended, and members of the National Association of Securities Dealers, Inc. act
as selling agents on a best efforts basis. The selling agents received a
commission of 5% of the issue price of each Unit sold during the initial
offering period with 1% being paid to the General Partner. Effective July 1,
1995, and continuing during the continuous offering period, the selling
commission was reduced to 4%, all of which is retained by the selling agent.

         Randell Commodity Corporation, a Tennessee corporation, is the Managing
General Partner of the Partnership (the "Managing General Partner") and RanDelta
Capital Partners, L.P. is the Financial General Partner of the Partnership.
Pursuant to a Customer Agreement (the "Customer Agreement"), Refco, Inc.
("Refco") acts as the commodity broker for the Partnership and performs various
administrative services for it. Services performed for the Partnership by Refco
or the Managing General Partner under the terms of the Customer and the Limited
Partnership Agreements, include the following:

         (1) Executing all trades on behalf of the Partnership in conjunction
with the Partnership's Advisor.

         (2) Maintaining the Partnership books and records, which limited
partners or their duly authorized representatives may inspect during normal
business hours for any proper purpose upon reasonable written notice to the
Managing General Partner.

         (3) Furnishing each limited partner with a monthly statement describing
the performance of the Partnership, which sets forth aggregate management fees,
incentive fees, brokerage commissions and other expenses incurred or accrued by
the Partnership during the month.

         (4) Forwarding annual certified financial statements (including a
balance sheet and statement of income) to each limited partner.

         (5) Providing each limited partner with tax information necessary for
the preparation of his annual federal


                                      -2-

<PAGE>   3

income tax return and such other information as the CFTC may by regulation
require.

         (6) Performing secretarial and other clerical responsibilities and
furnishing office space and equipment as may be necessary for supervising the
affairs of the Partnership.

         (7) Administering the purchase, redemption and transfer of Units and
distribution of profits, if any.

         The Customer Agreement under which Refco, Inc. acts as the futures
broker for the Partnership may be terminated by the Partnership or Refco upon 5
days' notice.

         During 1993, and through June 1994, under the terms of the Customer
Agreement, the Partnership paid commodity brokerage commissions to Refco on a
round-turn basis in an amount equal to the lesser of 80% of Refco's published
rates for non-member speculative accounts or $45.50. This commission rate was
renegotiated by the General Partner and effective July 1, 1994, commissions
payable to Refco were reduced to $32.50 per round-turn. The Partnership's
current rate is $32.50. A round-turn is the opening and closing of a commodity
futures position consisting of one contract. Effective June 1, 1997, 1/2 of the
round-turn commission is charged on the opening of a position and 1/2 is charged
on the close. The Partnership assets earn interest from Refco on 100% of the
average daily equity maintained in cash in the Partnership's trading account at
a rate equal to 80% of the average yield on thirteen week U.S. Treasury Bills
issued during each month.

(B) REGULATION

         Under the Commodity Exchange Act, as amended (the "Act"), commodity
exchanges and commodity futures trading are subject to regulation by the
Commodity Futures Trading Commission (the "CFTC"). The Act requires "commodity
pool operators," and "commodity trading advisors," to be registered and to
comply with various reporting and record keeping requirements. The CFTC may
suspend a commodity pool operator's or advisor's registration if it finds that
its trading practices tend to disrupt orderly market conditions or in certain
other situations. In the event that the registration of the Managing General
Partner as a commodity pool operator or as a commodity trading advisor is
terminated or suspended, the Managing General Partner would be unable to
continue to manage the business of the Partnership. Should the Managing General
Partner's registration be suspended, termination of the Partnership might
result. The act also requires Refco to be registered as a "futures commission
merchant."

         In addition to such registration requirements, the CFTC and certain
commodity exchanges have established limits on the maximum net long or net short
position which any person may hold or control in particular commodities. The
CFTC has adopted a rule requiring all domestic commodity exchanges to submit for
approval speculative position limits for all futures contracts traded on such
exchanges. Most exchanges also limit the changes in commodity futures contract
prices that may occur during a single trading day. The Partnership will not
trade on any commodity exchanges which are not subject to regulation by any
United States government agency.

(C) FINANCIAL INFORMATION ABOUT INDUSTRY SEGMENTS

         The Partnership's business constitutes only one segment, speculative
trading of commodity futures contracts, for financial reporting purposes. The
Partnership does not engage in sales of goods or services. The Partnership began
trading activities December 1, 1991, at which time Partnership capital was
$1,392,168.

(D) NARRATIVE DESCRIPTION OF BUSINESS

         (1)  See Items 1(a), (b) and (c) above.

                  (i)  through (xii) - Not applicable.

                  (xiii) - the Partnership has no employees.

(E) FINANCIAL INFORMATION ABOUT FOREIGN AND DOMESTIC OPERATIONS AND EXPORT SALES





                                      -3-
<PAGE>   4

         Not applicable because the Partnership does not engage in sales of
goods or services.

ITEM 2.  PROPERTIES

         The Partnership does not own or lease any properties. The Managing
General Partner operates out of facilities provided by its parent, Randell
Corporation.

ITEM 3.  LEGAL PROCEEDINGS

         The Managing General Partner is not aware of any pending legal
proceedings to which the Partnership is a party or to which any of its assets
are subject.

ITEM 4.  SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.

         N/A - No security holders.






                                       -4-


<PAGE>   5



                                     PART II

ITEM 5.  MARKET FOR THE REGISTRANT'S COMMON STOCK AND RELATED STOCKHOLDER
         MATTERS

         There is no trading market for the Units, and none is likely to
develop. Units are transferable only after written notice has been given to the
Managing General Partner. Units may be redeemed as of the last day of any
calendar quarter upon 10 days written notice to the Managing General Partner at
the Redemption Net Asset Value (as defined in the Limited Partnership
Agreement).

ITEM 6.  SELECTED FINANCIAL DATA

         The following is a summary of the total assets of the Partnership as of
December 31, 1998, 1997, 1996, 1995, and 1994, and the results of operations for
each of the years in the five-year period ended December 31, 1998.

         Net increase (decrease) in components of Partnership capital from
operations are as follows:

<TABLE>
<CAPTION>
                                        1998          1997           1996          1995            1994
                                        ----          ----           ----          ----            ----
<S>                               <C>              <C>            <C>            <C>           <C>
Realized & unrealized trading
gains(losses) net of brokerage
commission and clearing
fees of $770,081, 565,229,
$333,677, and $438,742,
respectively                      $(1,711,609)    $  (514,269)    $ 2,844,850    $ 1,710,300    $(1,022,795)

Income (Loss) from
Operations                           (609,288)        619,010       3,597,285      2,156,798       (502,871)

Cash dividends per unit                    --              13.61           14.18          --             --

Interest income                       332,240         294,507         187,206        112,821         81,182

Management fee                        259,437         223,279         151,969         85,331         76,157

Administrative expenses                72,000          58,403          82,026         44,869         39,830

Incentive fee                          14,116           3,091         384,117        108,815             --

Net Gain (Loss) per unit*                 (50.01)         (19.61)         115.23          77.87         (46.63)

Total Assets                      $ 5,504,092     $ 6,647,645     $ 4,895,087    $ 3,205,072    $ 1,759,977


</TABLE>

* Calculated as net earnings (loss) allocated to limited partners divided by
average units outstanding during the year.




                                       -5-


<PAGE>   6




 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
    OPERATIONS.

(A) RESULTS OF OPERATIONS

         Trading results were unprofitable for the fiscal year ended December
31, 1998. Trading during the fiscal year resulted in a decrease in net asset
value per Unit from $192.66 to $146.24 a decrease of 24.09% attributable
primarily to losses in grains.

         Trading results were unprofitable for the fiscal year ended December
31, 1997. Trading during the fiscal year resulted in a decrease in net asset
value per Unit from $245.41 to $192.66 a decrease of 21.49% attributable
primarily to losses in grains and livestock.

         Trading results were profitable for the fiscal year ended December 31,
1996. Trading during the fiscal year resulted in an increase in net asset value
per Unit from $125 (after payment of distributions of $288,507) to $245.41 an
increase of 96.3% attributable primarily to gains in grain contracts.

(B)  LIQUIDITY.

         The Partnership does not engage in sales of goods or services. Its only
assets are its capital in its commodity futures trading account, consisting of
cash and net unrealized appreciation on open futures contracts, and interest
receivable. Because of the low margin deposits normally required in commodity
futures trading, relatively small price movements may result in substantial
losses to the Partnership. Such substantial losses could lead to a material
decrease in liquidity. To minimize this risk the Partnership follows certain
policies including:

         (1) Partnership funds will be invested only in futures contracts which
are traded in sufficient volume to permit, in the opinion of the Advisor, ease
of taking and liquidating positions.

         (2) The Partnership will diversify its positions among various
commodities. The Partnership will not initiate additional positions in a single
commodity if such additional positions would result in a net single long or
short position in such commodity requiring as margin more than 15% of the net
assets of the Partnership.

         (3) The Partnership will not establish commodity positions if such
positions would result in required margins in excess of 80% of its net asset
value for all commodities combined.

         (4) The Partnership may occasionally accept delivery of a commodity.
Unless such delivery is disposed of promptly by retendering the warehouse
receipt representing the delivery to the appropriate clearing house, the
Partnership's position in the physical commodity will be fully hedged.

         (5) The Partnership will not employ the trading technique commonly
known as "pyramiding", in which the speculator uses unrealized profits on
existing positions as margin for the purchase or sale of additional positions in
the same or related commodities.

         (6) The Partnership may from time to time employ trading strategies
such as spreads or straddles on behalf of the Partnership. The term "spread"
describes a commodity futures trading strategy involving the simultaneous buying
and selling of futures contracts on the same commodity but involving different
delivery dates or markets and in which the trader expects to earn a profit from
a widening or narrowing of the difference between the prices of the two
contracts.

         Other than the risks inherent in commodity futures trading, the
Partnership knows of no trends, demands, commitments, events or uncertainties
which will result in or which are reasonably likely to result in the
Partnership's liquidity increasing or decreasing in any material way. The
Limited Partnership Agreement requires dissolution of the Partnership under
certain circumstances as defined in the Limited Partnership Agreement including
a decrease in the net asset value of a Unit at the close of business on any
business day to less than 50% of the highest average net asset value at which
Units have been sold.




                                       -6-


<PAGE>   7



         In order to limit credit risks, the Partnership does not enter into
counterparty transactions such as currency or other swaps and it limits its
trading activities to futures and options traded on U.S. commodity exchanges.

(C) CAPITAL RESOURCES

         The Partnership does not intend to raise any additional capital through
borrowing. Due to the nature of the Partnership's business, it will make no
significant capital expenditures, and substantially all its assets are and will
be represented by cash, United States Treasury securities and commodity futures
investments.

         The Partnership's capital consists of the capital contributions of the
partners as increased or decreased by gains or losses on commodity futures
trading and by expenses, interest income, redemptions of Units and distributions
of profits, if any. Gains or losses on commodity futures trading cannot be
predicted. Market moves in commodities are dependent upon fundamental and
technical factors which the Partnership may or may not be able to identify.
Partnership expenses consist of, among other things, commissions, management
fees and incentive fees. The level of these expenses is dependent upon the level
of trading and the ability of the Advisors to identify and take advantage of
price movements in the commodity markets, in addition to the level of net assets
maintained. Furthermore, interest income is dependent upon interest rates over
which the Partnership has no control. A forecast cannot be made as to the level
of redemptions in any given period.

(D) INFLATION

         Inflation does have an effect on commodity prices and the volatility of
commodity markets; however, continued inflation is not expected to have a
material adverse effect on the Partnership's operations or assets. Because the
Partnership conducts business as a Partnership, and, as such does not pay
federal income taxes, neither the Taxpayer Relief Act of 1997 nor the Tax Reform
Act of 1986 had no effect on its operations or on its tax liability. However,
some expenses may be limited as to deductibility by individual partners.

(E) YEAR 2000 ISSUE

         The Partnership relies on the General Partners to provide the
Partnership with certain calculations and reports, so if the Year 2000 Issue is
material to the General Partners, then it may impact the Partnership. However,
the Year 2000 issue is not material for the General Partners since the
administration software is generally "off-the-shelf and the vendors have advised
the General Partners that the software is Year 2000 compliant. In addition, the
Partnership utilizes computer systems and applications maintained by its
commodity broker for trading activities and recordkeeping. The General Partners
have been advised by the operators of these systems that conversion and
implementation activities for mission critical systems are in process of being
implemented and tested and are expected to be in compliance by the middle of
1999. Neither the software replacement nor the compliance review is expected to
be material or to yield noncompliance issues that are material.

ITEM 7(A). QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

         Not Applicable.

ITEM 8.  FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

         Financial statements meeting the requirements of Regulation S-X are
indexed and included beginning on page F-1 of this report.

         The supplementary financial information specified by Item 302 of
Regulation S-K is not applicable.

ITEM 9.  CHANGE IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND 
         FINANCIAL DISCLOSURE

         None.





                                       -7-


<PAGE>   8



                                    PART III

ITEM 10.  DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

         The Partnership has no directors or executive officers. The Partnership
is managed by its Managing General Partner. Trading decisions for the
Partnership are made by the Managing General Partner.

ITEM 11.  EXECUTIVE COMPENSATION

         The Partnership has no directors or officers. The Managing General
Partner and Refco perform the services described in "Item 1. Business" herein.

         For the fiscal year ended December 31, 1998, incentive fees expensed
totaled $14,116. Management fees expensed totaled $259,437. A total of $737,296
in brokerage commissions were paid to Refco.

ITEM 12.  SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

(A) SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS

         None.

(B) SECURITY OWNERSHIP OF MANAGEMENT

         Under the terms of the Limited Partnership Agreement, the Partnership's
affairs are managed by the Managing General Partner and it has discretionary
authority over the Partnership's investments. As of December 31, 1998, the
General Partners' investment in the Partnership was $283,263.

(C) CHANGES IN CONTROL

         None.

ITEM 13.  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

(A)      ACCOUNTS OF AFFILIATES OF THE COMMODITY BROKER

         The officers, directors and employees and associated persons of Refco
trade in commodity futures contracts for their own accounts. In addition, Refco
is a registered futures commission merchant and executes transactions in
commodity futures contracts for its customers. Thus, it is possible that Refco
could execute transactions for the Partnership in which the other parties to the
transactions are its officers, directors, employees or customers. Such persons
might also compete with the Partnership in making purchases or sales of
contracts without knowing that the Partnership is also bidding on such
contracts.

(B)      OTHER ACTIVITIES AND ACCOUNTS OF THE GENERAL PARTNER

         The Managing General Partner trades in commodity futures contracts for
its own accounts and for the accounts of other customers. It is possible that
the Managing General Partner may engage in transactions on its own behalf or on
behalf of others having an effect on transactions involving the Partnership.

(C)      OTHER RELATIONSHIPS

         The sole shareholder of the parent of the Managing General Partner is a
partner in the law firm which is counsel to the Partnership, the Managing
General Partner and the Memphis branch of Refco.




                                       -8-


<PAGE>   9



                                     PART IV

ITEM 14.  EXHIBITS AND FINANCIAL STATEMENT SCHEDULES AND REPORTS

(A)(1)   FINANCIAL STATEMENTS

         See Index to Financial Statements; infra.

(A)(2)   FINANCIAL STATEMENT SCHEDULES

         Schedules are omitted for the reason that they are not required or are
not applicable or that equivalent information has been included in the financial
statements or the notes thereto.

(A)(3)   EXHIBITS

(3)   Articles of Incorporation and By-Laws*

i)   Limited Partnership Agreement dated as of September 19, 1990.*

ii)  Certificate of Limited Partnership of the Partnership as filed with the
Shelby County Recorder of Deeds on September 19, 1990.*

(a)(3)(2) Material Contracts

i)   Form of Selling Agreement among the Partnership and National Association
of Securities Dealers, Inc. member.*

ii)  Form of Customer Agreement between the Partnership and Refco, Inc.*

iii) Form of Subscription Agreement to be executed by each purchaser of Units.*

iv)  Form of Escrow of Funds Agreement among the Partnership and National Bank
of Commerce.*

(27) Financial Data Schedule (For SEC use only).


--------------------

 *Incorporated herein by reference to the Partnership's Registration Statement 
on Form S-1, Commission File No. 33-37802.




                                       -9-


<PAGE>   10



                                CERES FUND, L.P.

                          INDEX TO FINANCIAL STATEMENTS

                             ----------------------

<TABLE>
<CAPTION>


                                                                             Page(s)
                                                                             -------

<S>                                                                          <C>
Independent Auditors' Report..................................................F-1

Financial Statements:

  Statements of Financial Condition as of December 31, 1998 and 1997..........F-2

  Statements of operations for the years ended December 31, 1998,
         1997 and 1996........................................................F-3

  Statements of Changes in Partners' Capital for the years ended 
         December 31, 1998, 1997 and 1996.....................................F-4

  Statements of Cash Flows for the years ended December 31, 1998,
         1997 and 1996 .......................................................F-5

  Summary of Net Asset Values at December 31, 1998, 1997 and 1996 ............F-6

  Notes to Financial Statements ..............................................F-9

  Schedule of Investments at December 31, 1998...............................F-18

  Affirmation................................................................F-19

</TABLE>



<PAGE>   11



                          INDEPENDENT AUDITORS' REPORT


The Partners
Ceres Fund, L.P.:


We have audited the accompanying statements of financial condition of Ceres
Fund, L.P. (a Tennessee Limited Partnership) as of December 31, 1998 and 1997
and summary of net asset values as of December 31, 1998, 1997 and 1996, and the
related statements of operations, changes in partners' capital and cash flows
for each of the years in the three-year period ended December 31, 1998. These
financial statements are the responsibility of the Partnership's management. Our
responsibility is to express an opinion on these financial statements based on
our audits.

We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Ceres Fund, L.P. (a Tennessee
Limited Partnership) as of December 31, 1998 and 1997, and the results of its
operations and its cash flows for each of the years in the three-year period
ended December 31, 1998, in conformity with generally accepted accounting
principles.

Our audits were made for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplementary information included in
Schedule 1 is presented for purposes of additional analysis and is not a
required part of the basic financial statements. Such information has been
subjected to the auditing procedures applied in the audits of the basic
financial statements and, in our opinion, is fairly stated in all material
respects in relation to the basic financial statements taken as a whole.


                                        KPMG LLP


Memphis, Tennessee
February 12, 1999





                                      F-1
<PAGE>   12
                                CERES FUND, L.P.
                        (A Tennessee Limited Partnership)

                        Statements of Financial Condition

                           December 31, 1998 and 1997


<TABLE>
<CAPTION>

                                  ASSETS                       1998             1997
                                                            -----------      ---------
<S>                                                         <C>              <C>
Cash                                                        $   140,972        155,155
Equity in commodity futures trading account:
    U.S. government obligations at fair value (cost of
       $5,293,365 and $6,269,786 at December 31, 1998
       and 1997, respectively)                                5,322,469      6,308,524
    Cash                                                        452,502        141,589
    Unrealized gains (losses) on open futures contracts        (466,699)        27,202
    Open option contracts, at market                             51,875         10,780
Interest receivable                                               2,973          4,395
                                                            ===========      =========
       Total assets                                         $ 5,504,092      6,647,645
                                                            ===========      =========

                     LIABILITIES AND PARTNERS' CAPITAL
Liabilities:
    Accrued management fees                                 $    17,191         20,855
    Accrued incentive fees                                           --          1,662
    Other accrued expenses                                       63,429         60,387
    Redemptions payable                                         137,884         80,700
                                                            -----------      ---------
       Total liabilities                                        218,504        163,604
                                                            -----------      ---------
Partners' capital:
    General partners                                            283,263        357,891
    Limited partners                                          5,002,325      6,126,150
                                                            -----------      ---------
       Total partners' capital                                5,285,588      6,484,041
                                                            -----------      ---------
                                                            $ 5,504,092      6,647,645
                                                            ===========      =========
</TABLE>


See accompanying notes to financial statements.




                                      F-2
<PAGE>   13
                                CERES FUND, L.P.
                        (A Tennessee Limited Partnership)

                            Statements of Operations

                  Years ended December 31, 1998, 1997 and 1996



<TABLE>
<CAPTION>
                                                              1998            1997           1996
                                                           -----------     ----------     ----------
<S>                                                        <C>             <C>            <C>
Net (losses) gains on trading of commodity futures
   and options contracts:
       Realized gains (losses) on closed positions         $  (488,722)       472,553      3,457,913
       Change in unrealized losses on open
          futures contracts                                   (493,901)      (158,830)       (45,994)
       Change in unrealized gains (losses)
          on open options contracts                             41,095         10,780         (1,840)
                                                           -----------     ----------     ----------
                   Net (losses) gains on investments          (941,528)       324,503      3,410,079
Investment income - interest (note 3)                          332,240        294,507        187,206
                                                           -----------     ----------     ----------
                   (Loss) income from operations              (609,288)       619,010      3,597,285
                                                           -----------     ----------     ----------
Brokerage commissions (note 3)                                 737,296        797,000        541,907
Exchange, clearing fees and NFA charges                         32,785         41,772         23,322
Management fee allocations (note 2)                            259,437        223,279        151,969
Incentive fee allocations (note 2)                              14,116          3,091        384,117
Professional and administrative expenses                        72,000         58,403         82,026
                                                           -----------     ----------     ----------
                                                             1,115,634      1,123,545      1,183,341
                                                           -----------     ----------     ----------
                   Net (loss) earnings                     $(1,724,922)      (504,535)     2,413,944
                                                           ===========     ==========     ==========
                   Net (loss) earnings allocated to
                     general partner                       $   (74,628)       (16,850)       208,349
                                                           ===========     ==========     ==========
                   Net (loss) earnings allocated to
                     limited partners                      $(1,650,294)      (487,685)     2,205,595
                                                           ===========     ==========     ==========
                   Average net (loss) earnings per unit    $    (50.01)        (19.61)        115.23
                                                           ===========     ==========     ==========
</TABLE>


See accompanying notes to financial statements.







                                      F-3
<PAGE>   14
                                CERES FUND, L.P.
                        (A Tennessee Limited Partnership)

                   Statements of Changes in Partners' Capital

                  Years ended December 31, 1998, 1997 and 1996



<TABLE>
<CAPTION>
                                                             GENERAL       LIMITED
                                                             PARTNERS      PARTNERS        TOTAL
                                                            ---------     ----------     ----------
<S>                                                         <C>           <C>            <C>
Partners' capital at December 31, 1995                      $ 166,392      2,831,228      2,997,620
Capital contributions (395 units)                                  --         96,154         96,154
Redemption of units (2,798 units)                                  --       (442,122)      (442,122)
Distributions                                                      --       (288,507)      (288,507)
Net income                                                    208,349      2,205,595      2,413,944
                                                            ---------     ----------     ----------
Partners' capital at December 31, 1996                        374,741      4,402,348      4,777,089
Capital contributions (13,552 units)                               --      2,755,044      2,755,044
Redemption of units (1,555 units)                                  --       (299,329)      (299,329)
Distributions (1,862 units)                                        --       (244,228)      (244,228)
Net loss                                                      (16,850)      (487,685)      (504,535)
                                                            ---------     ----------     ----------
Partners' capital at December 31, 1997                        357,891      6,126,150      6,484,041
Capital contributions (4,353 units)                                --        866,406        866,406
Redemption of units (1,944 units)                                  --       (339,937)      (339,937)
Net loss                                                      (74,628)    (1,650,294)    (1,724,922)
                                                            ---------     ----------     ----------
Partners' capital at December 31, 1998                      $ 283,263      5,002,325      5,285,588
                                                            =========     ==========     ==========


Average net asset value per limited partnership unit at:
    December 31, 1998; 34,206.8518 units outstanding                                     $   146.24
                                                                                         ==========
    December 31, 1997; 31,797.3173 units outstanding                                     $   192.66
                                                                                         ==========
    December 31, 1996; 17,938.6369 units outstanding                                     $   245.41
                                                                                         ==========
</TABLE>


See accompanying notes to financial statements.





                                      
                                      F-4
<PAGE>   15
                                CERES FUND, L.P.
                        (A Tennessee Limited Partnership)

                            Statements of Cash Flows

                  Years ended December 31, 1998, 1997 and 1996


<TABLE>
<CAPTION>
                                                                  1998           1997           1996
                                                              -----------     -----------    ----------
<S>                                                           <C>             <C>            <C> 
Cash flows from operating activities:
    Net (loss) earnings                                       $(1,724,922)      (504,535)     2,413,944
       Adjustments to reconcile net (loss) earnings to
         net cash provided (used) by operating activities:
            Net unrealized losses on open contracts               452,806        148,050         47,834
            (Increase) decrease in operating assets:
              Investments in commodities futures
                 trading account                                  675,142     (1,858,269)    (1,641,232)
              Interest receivable                                   1,422          4,262         (3,601)
            Increase (decrease) in operating liabilities:
              Accrued management fees                              (3,664)        10,822            (44)
              Accrued incentive fees                               (1,662)       (31,187)       (65,111)
              Other accrued expenses                                3,042         17,843         27,055
                                                              -----------     ----------     ----------
                 Net cash (used in) provided by
                   operating activities                          (597,836)    (2,213,014)       778,845
Cash flows from financing activities:
    Net proceeds from sale of limited partnership units           866,406      2,755,044         96,154
    Redemptions of limited partnership units                     (282,753)      (251,201)      (493,476)
    Distributions to limited partners                                  --       (244,228)      (288,507)
                                                              -----------     ----------     ----------
                 Net cash provided by (used in)
                   financing activities                           583,653      2,259,615       (685,829)
                                                              -----------     ----------     ----------
Net (decrease) increase in cash                                   (14,183)        46,601         93,016
Cash at beginning of year                                         155,155        108,554         15,538
                                                              -----------     ----------     ----------
Cash at end of year                                           $   140,972        155,155        108,554
                                                              ===========     ==========     ==========

</TABLE>

See accompanying notes to financial statements.




                                       F-5
<PAGE>   16
                                CERES FUND, L.P.
                        (A Tennessee Limited Partnership)

                           Summary of Net Asset Values

                                December 31, 1998

<TABLE>
<CAPTION>
                               NUMBER           NUMBER          NUMBER          NUMBER        NET ASSET   TOTAL LIMITED
    SUBSCRIBER                OF UNITS         OF UNITS        OF UNITS        OF UNITS         VALUE      PARTNER NET
   ADMISSION DATE            SUBSCRIBED        WITHDRAWN       DISTRIBUTED     OUTSTANDING     PER UNIT    ASSET VALUE
--------------------        ------------     -------------    -------------   ------------- -------------- ------------
<S>                         <C>              <C>              <C>             <C>           <C>            <C> 
January 1, 1996             43,256.2273      (22,527.1643)      1,793.0394      17,522.1024  $    146.6195  $2,569,081
November 1, 1996               239.4689          (65.0721)         41.3760         215.7728       146.6195      31,636
December 1, 1996               155.2598          (73.6830)         27.5246         109.1014       146.6195      15,996
January 1, 1997                708.7734         (251.8320)             --          456.9414       146.6195      66,997
February 1, 1997             1,555.9517         (225.5000)             --        1,330.4517       146.6194     195,070
March 1, 1997                2,630.9876         (463.1330)             --        2,167.8546       146.5239     317,642
April 1, 1997                3,704.4494         (163.7290)             --        3,540.7204       146.3058     518,028
May 1, 1997                  1,381.6388         (259.8730)             --        1,121.7658       146.0901     163,879
June 1, 1997                   988.1934         (113.8470)             --          874.3464       146.6194     128,196
July 1, 1997                   826.3808           (6.8940)             --          819.4868       143.2701     117,408
August 1, 1997                 493.4459                --              --          493.4459       144.2740      71,191
September 1, 1997              209.0262                --              --          209.0262       143.9424      30,088
October 1, 1997                496.1560                --              --          496.1560       144.3731      71,631
November 1, 1997               229.6653                --              --          229.6653       144.4227      33,169
December 1, 1997               327.4226                --              --          327.4226       144.7055      47,380
January 1, 1998                103.8085                --              --          103.8085       144.8718      15,039
February 1, 1998               509.8596          (50.8030)             --          459.0566       144.5137      66,340
March 1, 1998                1,177.3329                --              --        1,177.3329       144.7433     170,411
April 1, 1998                  717.5374                --              --          717.5374       146.2485     104,939
May 1, 1998                    422.0476                --              --          422.0476       146.2485      61,724
June 1, 1998                   669.0029                --              --          669.0029       146.2485      97,840
August 1, 1998                 506.3963           (9.7090)             --          496.6873       145.9705      72,501
September 1, 1998               29.1615                --              --           29.1615       146.2467       4,265
October 1, 1998                217.9573                --              --          217.9573       146.2418      31,874
                            -----------       -----------      ----------       -----------    -----------  ----------  
                            61,556.1511      (24,211.2394)     1,861.9400       34,206.8518    $  146.2376  $5,002,325
                            ===========       ===========      ==========       ===========    ===========  ==========  
</TABLE>



See accompanying notes to financial statements.






                                       F-6
<PAGE>   17
                                CERES FUND, L.P.
                        (A Tennessee Limited Partnership)

                           Summary of Net Asset Values

                                December 31, 1997

<TABLE>
<CAPTION>
                         NUMBER           NUMBER          NUMBER          NUMBER        NET ASSET    TOTAL LIMITED
    SUBSCRIBER          OF UNITS         OF UNITS        OF UNITS        OF UNITS         VALUE       PARTNER NET
   ADMISSION DATE      SUBSCRIBED       WITHDRAWN       DISTRIBUTED     OUTSTANDING      PER UNIT     ASSET VALUE
-------------------   ------------     ------------     ------------    -----------     ----------    ------------
<S>                   <C>              <C>              <C>             <C>             <C>           <C> 
January 1, 1996       43,256.2273      (27,202.5977)     1,793.0394     17,846.6690     $ 192.7624    $3,440,167
November 1, 1996         239.4689          (65.0721)        41.3760        215.7728       192.7624        41,593
December 1, 1996         155.2598                --         27.5246        182.7844       192.7624        35,234
January 1, 1997          708.7734                --              --        708.7734       192.7624       136,625
February 1, 1997       1,555.9517                --              --      1,555.9517       192.7623       299,929
March 1, 1997          2,630.9876                --              --      2,630.9876       192.7625       507,155
April 1, 1997          3,704.4494                --              --      3,704.4494       192.7624       714,078
May 1, 1997            1,381.6388                --              --      1,381.6388       192.7624       266,328
June 1, 1997             988.1934                --              --        988.1934       192.7624       190,486
July 1, 1997             826.3808                --              --        826.3808       190.5557       157,472
August 1, 1997           493.4459                --              --        493.4459       191.8761        94,680
September 1, 1997        209.0262                --              --        209.0262       191.4386        40,016
October 1, 1997          496.1560                --              --        496.1560       192.0056        95,265
November 1, 1997         229.6653                --              --        229.6653       192.0699        44,112
December 1, 1997         327.4226                --              --        327.4226       192.4436        63,010
                      -----------       -----------      ----------     -----------     ----------    ---------- 
                      57,203.0471      (27,267.6698)     1,861.9400     31,797.3173     $ 192.6625    $6,126,150
                      ===========       ===========      ==========     ===========     ==========    ==========
</TABLE>



See accompanying notes to financial statements.




                                       F-7
<PAGE>   18
                                CERES FUND, L.P.
                        (A Tennessee Limited Partnership)

                           Summary of Net Asset Values

                                December 31, 1996

<TABLE>
<CAPTION>
                                         NUMBER           NUMBER          NUMBER         NET ASSET      TOTAL LIMITED
    SUBSCRIBER                          OF UNITS         OF UNITS        OF UNITS          VALUE         PARTNER NET
   ADMISSION DATE                      SUBSCRIBED        WITHDRAWN      OUTSTANDING      PER UNIT        ASSET VALUE
-------------------                   -----------      -------------    -----------     -----------     -------------
<S>                                   <C>              <C>              <C>             <C>             <C>
January 1, 1996                       43,256.2273      (25,712.3191)    17,543.9082     $    245.38     $   4,304,987    
November 1, 1996                         239.4689                --        239.4689          246.28            58,977    
December 1, 1996                         155.2598                --        155.2598          247.23            38,384    
                                      -----------      ------------     -----------     -----------     -------------
                                      43,650.9560      (25,712.3191)    17,938.6369     $    245.41     $   4,402,348    
                                      ===========      ============     ===========     ===========     =============
</TABLE>



See accompanying notes to financial statements.






                                       F-8
<PAGE>   19


                                CERES FUND, L.P.
                        (A Tennessee Limited Partnership)

                          Notes to Financial Statements

                           December 31, 1998 and 1997



(1)    SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

       (A)    ORGANIZATION

              Ceres Fund, L.P. (the Partnership) is a Tennessee limited
              partnership organized on September 19, 1990 to engage in the
              speculative trading of commodities futures contracts and other
              commodity interests. Randell Commodity Corporation (Randell) and
              RanDelta Capital Partners, L.P. (RanDelta) are the general
              partners. Randell serves as the managing general partner and
              RanDelta serves as the financial general partner.
              Randell acts as commodity trading advisor with respect to the
              Partnership.

              The Partnership solicited subscriptions for a maximum of 100,000
              units of limited partnership interest at $105 per unit ($100 net
              of commission). During the initial offering period 13,471.6805
              units were sold and the Partnership commenced trading commodity
              futures contracts on December 1, 1991. The Partnership continues
              to sell units as of the end of each month at the then average net
              asset value per unit plus a selling commission of 4% in accordance
              with the terms of the Limited Partnership Agreement, and can
              continue selling units until the maximum number of units offered
              have been sold.

              Income and expenses of the Partnership (excluding the Management
              Allocation and Incentive Allocation) are allocated pro rata among
              the partners based on their respective capital accounts as of the
              beginning of the month in which the items of income and expense
              accrue, except that limited partners have no liability for
              partnership obligations in excess of his or her capital account,
              including earnings. The Management Allocation and Incentive
              Allocation are allocated to the Limited Partners only in
              accordance with the terms of the Limited Partnership Agreement.

              Units may not be redeemed during the first six months after they
              are purchased. Thereafter, limited partners may redeem their units
              at the redemption net asset value per unit as of the end of any
              calendar quarter upon ten days written notice to the managing
              general partner. The redemption charge will be based on the
              redemption net asset value on all units redeemed as more fully
              described in the offering prospectus.

              Under the terms of the partnership agreement, the Partnership will
              terminate on the earlier of December 31, 2020, or the occurrence
              of certain events as more fully described in the Limited
              Partnership Agreement.

       (B)    EQUITY IN COMMODITY FUTURES TRADING ACCOUNT

              U.S. government obligations represent investments in U.S. Treasury
              Bills with a maturity of 90 days or less and are carried at fair 
              value and any unrealized gains and losses are reflected in income.
              Cash represents deposits at brokers and funds temporarily held in 
              interest bearing accounts.




                                     F-9                             (Continued)
<PAGE>   20
                                CERES FUND, L.P.
                        (A Tennessee Limited Partnership)

                          Notes to Financial Statements

                           December 31, 1998 and 1997



       (C)    FUTURES CONTRACTS AND OPTIONS CONTRACTS

              Futures contracts are required to be made on a commodity exchange
              and call for the future delivery of various agricultural and
              nonagricultural commodities, currencies or financial instruments
              at a specified time and place. These contractual obligations,
              depending on whether one is a buyer or a seller, may be satisfied
              either by taking or making physical delivery of an approved grade
              of the particular commodity (or, in the case of some contracts, by
              cash settlement) or by making an offsetting sale or purchase of an
              equivalent commodity futures contract on the same (or a linked)
              exchange prior to the designated date of delivery. In market
              terminology, a trader who purchases a futures contract is "long"
              in the futures market, and a trader who sells a futures contract
              is "short" in the futures market. Outstanding futures contracts
              (those that have not been closed out by an offsetting purchase or
              sale or by delivery) are known as "open trades" or "open
              positions."

              Among the agricultural commodities for which there are futures
              contracts are corn, oats, wheat, soybeans, soybean oil, soybean
              meal, live cattle, live hogs, pork bellies, coffee, sugar, cocoa
              and cotton. Nonagricultural commodities for which there are
              futures contracts include copper, silver, gold, platinum, lumber,
              currency, Treasury bonds and bills, mortgage-backed securities,
              Eurodollar deposits, certain petroleum products and stock,
              inflation and interest rate related indices.

              An option on a futures contract gives the purchaser of the option
              the right (but not the obligation) to take a position at a
              specified price (the "striking", "strike" or "exercise" price) in
              the underlying futures contract. Options have limited life spans,
              usually tied to the delivery or settlement date of the underlying
              futures contract. Some options, however, expire significantly in
              advance of such date. The value of an option at any given point in
              time is a function of market volatility and the price level of the
              underlying futures contract.

              Open futures contracts are valued at the settlement price on the
              date of valuation as determined by the exchange on which the
              contract was traded. Changes in the market value of open futures
              contracts, entered into for speculative investing, are recorded as
              unrealized gains or losses in the accompanying statement of
              operations. Realized gains and losses (excluding commissions and
              other exchange related fees) are recognized when such contracts
              are closed.

       (D)    INCOME TAXES

              No provision for income taxes has been made in the accompanying
              financial statements since, as a partnership, income and losses
              for tax purposes are allocated to the partners for inclusion in
              their respective tax returns.



                                     F-10                            (Continued)

<PAGE>   21
                                CERES FUND, L.P.
                        (A Tennessee Limited Partnership)

                          Notes to Financial Statements

                           December 31, 1998 and 1997



       (E)    MANAGEMENT ESTIMATES

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

       (F)    RECLASSIFICATIONS

              Certain 1997 and 1996 amounts have been reclassified to conform to
              their 1998 presentation.

       (G)    AVERAGE NET (LOSS) EARNINGS PER UNIT

              The average net (loss) earnings per unit as reported on the
              statement of operations was calculated as (loss) earnings
              allocated to the limited partners divided by average outstanding
              units during the year.

       (G)    RECENT ACCOUNTING PRONOUNCEMENT

              In June 1998, SFAS No. 133, " Accounting for Derivative
              Instruments and Hedging Activity," was issued. This statement
              establishes accounting and reporting standards for derivative
              instruments, including certain derivative instruments embedded in
              other contracts, and for hedging activities. This statement is
              effective for fiscal years, and quarters of fiscal years beginning
              after June 15, 1999. The Partnership intends to comply with this
              statement in 2000.

       (H)    YEAR 2000

              The Partnership is addressing the issues associated with the
              programming code in existing computer systems as the millennium
              (year 2000) approaches. The year 2000 problem is pervasive and
              complex as virtually every computer operation will be affected in
              some way by the rollover of the two digit year value to 00. The
              issue is whether computer systems will properly recognize date
              sensitive information when the year changes to 2000. Systems that
              do not properly recognize such information could generate
              erroneous data or cause a system to fail.

              The Partnership utilizes computer systems and applications
              maintained by Refco, Inc. ("Refco"), its commodity broker, for
              trading activities and recordkeeping. Management has assessed the
              impact of Year 2000 issues on the computer systems and
              applications, on which the Partnership relies. The operators of
              the systems have developed a remediation plan. Conversion and
              implementation activities for mission critical systems are in
              process and management expects


                                     F-11                            (Continued)

<PAGE>   22
                                CERES FUND, L.P.
                        (A Tennessee Limited Partnership)

                          Notes to Financial Statements

                           December 31, 1998 and 1997



              implementation and testing, by the operators, to be completed by
              the middle of 1999. The Partnership's costs associated with these
              systems changes will not be material, because of its relationship
              with Refco. Estimates of the completion date for implementation
              and testing of mission critical systems are based on assumptions
              which management and the operators believe are reasonable and
              appropriate.

(2)    MANAGEMENT AGREEMENT

       The Partnership has entered into a Management Agreement in consideration
       of and as compensation for the services to be rendered by the General
       Partners and trading advisors. The Partnership pays a monthly Management
       Allocation equal to 1/3 of 1% (4% per annum) of the Adjusted Net Asset
       Value of units at month end, plus a quarterly Incentive Allocation of 15%
       of any net new appreciation in the adjusted net asset value of units for
       the quarter. Such fees were as follows:

<TABLE>
<CAPTION>
                                              1998         1997         1996
                                            --------     -------      ------- 
<S>                                         <C>          <C>          <C>
            Management fees                 $259,437     223,279      151,969
            Incentive fees                    14,116       3,091      384,117
</TABLE>

(3)    CUSTOMER AGREEMENT WITH REFCO, INC.

       The Partnership entered into a customer agreement with Refco, pursuant to
       which the Partnership deposits its assets in a commodity trading account
       with Refco who executes trades on behalf of the Partnership. The
       Partnership agrees to pay such brokerage and commission charges and fees
       as Refco may establish and charge from time to time. Refco charges the
       Partnership commissions on commodity trades at the rate of $32.50 per
       round-turn. Total commissions charged to the Partnership by Refco in
       1998, 1997 and 1996 were $737,296, $797,000 and $541,907, respectively.
       The Partnership earns interest on Treasury Bills held in its account, on
       interest-bearing accounts and on 80% of the average daily equity
       maintained as cash in the Partnership's trading account at a rate that
       approximated the average yield on 13-week United States Treasury Bills.
       Total interest earned by the Partnership in 1998, 1997 and 1996 was
       $332,240, $294,507 and $187,206, respectively.

(4)    RELATED PARTIES

       The sole shareholder of the parent of the managing General Partner is an
       active partner in the law firm which is the counsel to the Partnership,
       the General Partners and the Memphis branch of Refco, the Partnership's
       commodity broker.



                                     F-12                            (Continued)

<PAGE>   23
                                CERES FUND, L.P.
                        (A Tennessee Limited Partnership)

                          Notes to Financial Statements

                           December 31, 1998 and 1997



(5)    DISTRIBUTION TO LIMITED PARTNERS

       On January 16, 1997, the General Partner declared a distribution to the
       limited partners equal to the difference between the December 31, 1996
       net asset value per unit and $210 per unit. This distribution, totaling
       $244,228 in cash (approximately $13.61 per unit) and 1,861.94 in units,
       resulted in each unit holder having a net asset value of $210 per unit on
       January 1, 1997. No distributions were declared in 1998.

(6)    OFF-BALANCE-SHEET RISK

       In the normal course of business, the Partnership enters into
       transactions in financial instruments with off-balance-sheet risk. These
       financial instruments include financial futures contracts and option
       contracts. Futures contracts provide for the delayed delivery of
       commodities, which the seller agrees to make delivery at a specified
       future date, at a specified price. Futures contracts and options on such
       contracts are held for trading and arbitrage purposes. The notional value
       of these contracts reflect the extent of involvement the Partnership has
       in particular types of contracts. Risk arises from movements in
       commodities' values. At December 31, 1998, the underlying notional value
       of open contract commitments were long $(18,214,281) and short
       $(13,052,700).

       The Partnership trades in a variety of futures and options financial
       instruments, and all open positions are reported at fair value. Trading
       loss, including realized and unrealized gains and losses, from financial
       futures contracts and options transactions for the year ended December
       31, 1998 was $(941,528). The average fair value of open commodity
       financial instruments, and the year-end market value of open commodities
       are as follows:

<TABLE>
<CAPTION>
                                             AVERAGE FAIR           MARKET FAIR
                                             VALUE OF OPEN      OF OPEN POSITIONS AT
                                         POSITIONS DURING 1998   DECEMBER 31, 1998
                                         ---------------------  --------------------
<S>                                      <C>                    <C>  
             Assets (Long Positions)         $    (254,613)           (423,129)
             Liabilities (Short Positions)         126,446               8,305
</TABLE>


       MARKET RISK

       Derivative instruments involve varying degrees of off-balance sheet
       market risks, and changes in the level or volatility of interest rates,
       foreign currency exchange rates or market values of the underlying
       financial instruments or commodities underlying such derivative
       instruments frequently result in changes in the Partnership's unrealized
       profit (loss) on such derivative instruments as reflected in the
       Statements of Financial Condition. The Partnership's exposure to market
       risk is influenced by a number of factors, including the relationships
       among the derivative instruments held by the Partnership as well as the
       volatility and liquidity in the markets in which the financial
       instruments are traded.




                                    F-13                             (Continued)

<PAGE>   24
                                CERES FUND, L.P.
                        (A Tennessee Limited Partnership)

                          Notes to Financial Statements

                           December 31, 1998 and 1997


       CREDIT RISK

       The risks associated with exchange-traded contracts are typically
       perceived to be less than those associated with over-the-counter
       transactions (non-exchange-traded), because exchanges typically (but not
       universally) provide clearinghouse arrangements in which the collective
       credit (in some cases limited in amount, in some cases not) of the
       members of the exchange is pledged to support the financial integrity of
       the exchange.

       The fair value amounts in the above tables represent the extent of the
       Partnership's market exposure in the particular class of derivative
       instrument listed, but not the credit risk associated with counterparty
       nonperformance. The credit risk associated with these instruments from
       counterparty nonperformance is the net unrealized gain, if any, included
       on the Statement of Financial Condition.

(7)    FAIR VALUE OF FINANCIAL INSTRUMENTS

       Statement of Financial Accounting Standards No. 107, Disclosure About
       Fair Value of Financial Instruments, extends existing fair value
       disclosure practices for some instruments by requiring all entities to
       disclose the fair value of financial instruments, both assets and
       liabilities recognized and not recognized in the statement of financial
       condition, for which it is practicable to estimate fair value. If
       estimating fair value is not practicable, this Statement requires
       disclosures of descriptive information pertinent to estimating the value
       of a financial instrument. At December 31, 1998, substantially all of the
       Partnership's financial instruments, as defined in the Statement, are
       carried at fair value.



                                    F-14                             (Continued)
<PAGE>   25
                                CERES FUND, L.P.
                        (A Tennessee Limited Partnership)

                          Notes to Financial Statements

                        December 31, 1998, 1997 and 1996



(8)      SEGMENT INFORMATION

         The Fund's principal activity is speculative trading of agricultural
         commodities futures contracts and other commodity interests. The Fund
         has five reportable segments: soybean, cattle, grain spread, corn and
         cotton. The accounting policies of the segments are the same as those
         described in the summary of significant accounting policies. All other
         includes commodities interests traded in coffee, Deutsche Marks, S&P
         Petroleum, S&P Futures and Wheat.

         The results of operations and selected financial information by
         commodity trading segment for the three years ended December 31, 1998,
         1997 and 1996 are presented below:

<TABLE>
<CAPTION>
                                                                          GRAIN
                                                 SOYBEAN       CATTLE     SPREAD      CORN       COTTON      OTHER         TOTAL
                                               -----------    --------    -------   --------    --------    --------    ----------
<S>                                            <C>            <C>         <C>       <C>         <C>         <C>         <C>   
1998
RESULTS OF OPERATIONS:
Net gains (losses) from closed positions       $  (794,729)    121,714    391,865   (328,887)   (590,829)    (57,937)   (1,258,803)

Change in unrealized losses on
     open positions                                (83,434)   (343,915)     1,000    (70,000)       (296)      2,744      (493,901)
Change in unrealized gains (losses) on
     open position contracts                        51,720          --         --    (17,500)      6,875          --        41,095
                                               -----------    --------    -------   --------    --------    --------   -----------
       Net gains (losses) on trading 
         activities                            $  (826,443)   (222,201)   392,865   (416,387)   (584,250)    (55,193)   (1,711,609)
                                               ===========    ========    =======   ========    ========    ========              

Investment income - interest                                                                                               332,240
Management fees                                                                                                           (259,437)
Incentive fees                                                                                                             (14,116)
Professional and administrative expenses                                                                                   (72,000)
                                                                                                                       -----------
       Net earnings (loss)                                                                                             $(1,724,922)
                                                                                                                       ===========

SELECTED FINANCIAL INFORMATION:
Unrealized gains (losses) on open
     futures contracts                         $   (49,120)   (414,360)        --         --          --      (3,219)     (466,699)
Open option contracts, at market                    45,000          --         --         --       6,875          --        51,875
                                               -----------    --------    -------   --------    --------    --------   -----------
                                               $    (4,120)   (414,360)        --         --       6,875      (3,219)     (414,824)
                                               ===========    ========    =======   ========    ========    ========              
     Other unallocated amounts                                                                                           5,918,916
                                                                                                                       -----------
Total assets                                                                                                           $ 5,504,092
                                                                                                                       =========== 

</TABLE>


                                     F-15                            (Continued)

<PAGE>   26
                                CERES FUND, L.P.
                        (A Tennessee Limited Partnership)

                          Notes to Financial Statements

                        December 31, 1998, 1997 and 1996


<TABLE>
<CAPTION>
                                                                          GRAIN
                                                 SOYBEAN       CATTLE     SPREAD      CORN       COTTON      OTHER         TOTAL
                                               -----------    --------    -------   --------    --------    --------    ----------
<S>                                            <C>            <C>         <C>       <C>         <C>         <C>         <C>    
1997
RESULTS OF OPERATIONS:
Net gains (losses) from closed positions       $    25,735    (133,558)    266,214    (434,826)   (303,930)    214,146    (366,219)

Change in unrealized losses on
     open positions                                 43,194    (144,975)     (1,000)   (160,875)     36,696      68,130    (158,830)
Change in unrealized gains (losses) on
     open position contracts                        (6,720)         --          --      17,500          --          --      10,780
                                               -----------    --------     -------    --------    --------    --------  ----------
       Net gains (losses) on trading 
           activities                          $    62,209    (278,533)    265,214    (578,201)   (267,234)    282,276    (514,269)
                                               ===========    ========     =======    ========    ========    ========            
Investment income - interest                                                                                               294,507
Management fees                                                                                                           (223,279)
Incentive fees                                                                                                              (3,091)
Professional and administrative expenses                                                                                   (58,403)
                                                                                                                        ----------
       Net earnings (loss)                                                                                              $ (504,535)
                                                                                                                        ==========

SELECTED FINANCIAL INFORMATION:
Unrealized gains (losses) on open
     futures contracts                         $    34,314     (70,445)     (1,000)     70,000         296      (5,963)     27,202
Open option contracts, at market                    (6,720)         --          --      17,500          --          --      10,780
                                               -----------    --------     -------    --------    --------    --------  ----------
                                               $    27,594     (70,445)     (1,000)     87,500         296      (5,963)     37,982
                                               ===========    ========     =======    ========    ========    ========            
     Other unallocated amounts                                                                                           6,609,663
                                                                                                                        ----------
Total assets                                                                                                            $6,647,645
                                                                                                                        ==========
</TABLE>


                                     F-16                            (Continued)



<PAGE>   27
                                CERES FUND, L.P.
                        (A Tennessee Limited Partnership)

                          Notes to Financial Statements

                        December 31, 1998, 1997 and 1996


<TABLE>
<CAPTION>
                                                                          GRAIN
                                                 SOYBEAN       CATTLE     SPREAD      CORN       COTTON      OTHER         TOTAL
                                               -----------    --------    -------   --------    --------    --------    ----------
<S>                                            <C>            <C>         <C>       <C>         <C>         <C>         <C>  
1996
RESULTS OF OPERATIONS:
Net gains (losses) from closed positions       $  (158,391)   298,926   (10,178)   2,268,338     260,747     233,242     2,892,684

Change in unrealized losses on
     open positions                                (37,066)    97,610        --       62,125     (36,395)   (132,268)      (45,994)
Change in unrealized gains (losses) on
     open position contracts                            --         --        --           --      (1,840)         --        (1,840)
                                               -----------    -------   -------    ---------     -------    -------- 
       Net gains (losses) on trading
           activities                          $  (195,457)   396,536   (10,178)   2,330,463     222,512     100,974     2,844,850
                                               ===========    =======   =======    =========     =======    ========      
Investment income - interest                                                                                               187,206
Management fees                                                                                                           (151,969)
Incentive fees                                                                                                            (384,117)
Professional and administrative expenses                                                                                   (82,026)
                                                                                                                        ----------
       Net earnings (loss)                                                                                              $2,413,944
                                                                                                                        ==========

SELECTED FINANCIAL INFORMATION:
Unrealized gains (losses) on open
     futures contracts                         $    (8,880)    74,530        --      230,875     (36,400)    (74,093)      186,032
Open option contracts, at market                        --         --        --           --          --          --            -- 
                                               -----------    -------   -------    ---------     -------    --------    ----------
                                               $    (8,880)    74,530        --      230,875     (36,400)    (74,093)      186,032
                                               ===========    =======   =======    =========     =======    ========   

       Other unallocated amounts                                                                                         4,709,055
                                                                                                                        ----------
Total assets                                                                                                            $4,895,087
                                                                                                                        ==========
</TABLE>


                                     F-17                            (Continued)

<PAGE>   28
                                                                      SCHEDULE 1

                                CERES FUND, L.P.
                        (A Tennessee Limited Partnership)

                             Schedule of Investments

                                December 31, 1998



<TABLE>
<CAPTION>
                                                                  PAR OR
                                                                NUMBER OF             FAIR
                             Description                        CONTRACTS             VALUE
                                                               -----------         ----------
<S>                                                            <C>                 <C>
United States Treasury Bill due January 28, 1999                3,350,000          $3,339,215    
United States Treasury Bill due February 11, 1999                 400,000             397,970    
United States Treasury Bill due March 18, 1999                  1,600,000           1,585,284    
                                                                                   ----------
                                                                                    5,322,469    
                                                                                   ----------
Net cash balances from futures trading                                                452,502    
                                                                                   ----------
Open options contracts in futures trading accounts:
    February 9 Live Cattle                                                               (880)   
    April 9 Live Cattle                                                              (233,010)   
    June 9 Live Cattle                                                                (95,580)   
    August 9 Live Cattle                                                              (72,290)   
    April 9 Lean Hogs                                                                 (11,000)   
    June 9 Lean Hogs                                                                   (1,600)   
    March 9 Soybean Meal                                                               28,000    
    July 9 Soybean Meal                                                               (93,800)   
    March 9 Soybean Oil                                                              (133,620)   
    May 9 Soybean Oil                                                                  99,000    
    July 9 Soybean Oil                                                                 51,300    
    March 9 U S T Bond Future                                                          (7,344)   
    IOM S&P Index                                                                       4,125    
    March 9 Cotton Options                                                              6,000    
    March 9 Cotton Options                                                              3,000    
    March 9 Cotton Options                                                             (1,500)   
    March 9 Cotton Options                                                               (625)   
    March 9 Soybean - CBT Option                                                       22,500    
    March 9 Soybean - CBT Option                                                       22,500    
                                                                                   ----------
                                                                                     (414,824)   
                                                                                   ----------
    Total equity in futures trading accounts                                           37,678    
                                                                                   ----------
    Total investments                                                              $5,360,147    
                                                                                   ==========
</TABLE>


See accompanying independent accountant's report.





                                      F-18
<PAGE>   29



                                   AFFIRMATION


STATE OF TENNESSEE  )
                    )
CITY OF MEMPHIS     )

I, FRANK L. WATSON, JR. being duly sworn, deposes and says:

     1. I am President of Randell Commodity Corporation, the commodity pool
        operator and the managing general partner of Ceres Fund, L.P., as named
        in the attached Annual Report and am duly authorized to execute this
        Affirmation.

     2. To the best of my knowledge and belief, the information contained in
        the attached Annual Report is accurate and complete.


/s/ Frank L. Watson, Jr.
------------------------------------
Frank L. Watson, Jr., Chairman
Randell Commodity Corporation


     SWORN TO AND SUBSCRIBED before me this 26 day of March 1999.


/s/ Marty Morgan
----------------------------------------------
Marty Morgan
NOTARY PUBLIC



My Commission Expires: January 31, 2001




                                      F-19

<PAGE>   30




                                   SIGNATURES

         Pursuant to the requirements of Section 13 or 15 (d) 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, in the City of
Memphis, and State of Tennessee on the 26 day of March 1999.


CERES FUND, L.P.

By:   RANDELL COMMODITY CORPORATION
      Managing General Partner

      /s/ Frank L. Watson, Jr.
      ----------------------------------------
By:   Frank L. Watson, Jr.
      Chairman

      Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed below by the following person on behalf of the Managing
General Partner of the Registrant in the capacities and on the date indicated.


RANDELL COMMODITY CORPORATION
Managing General Partner of the Registrant


/s/ Frank L. Watson, Jr.
-----------------------------------------------
By:   Frank L. Watson, Jr., Principal
      Executive Officer & Sole Director

March 26, 1999