##### Table of Contents



UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
 WASHINGTON, D.C. 20549
 FORM 10-Q
 (X) QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
 For the quarterly period ended September 30, 2010
 OR ( ) TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
 
 000-51282
 FAIRFIELD FUTURES FUND L.P. II
 
   New York
    
    56-2421596(State or other jurisdiction of
    
    (I.R.S. Employerincorporation or organization)
    
    Identification No.)
 c/o Ceres Managed Futures LLC
522 Fifth Avenue  14th Floor
New York, New York 10036
 
  (212) 296-1999
 
   Yes X No
  Yes  No
  Large accelerated filer
    
    Accelerated filer
    
    Non-accelerated filer X
    
    Smaller reporting company
  Yes  No X




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##### 



FAIRFIELD FUTURES FUND L.P. II
 FORM 10-Q
 INDEX
 PagePART I - Financial Information:
    
    NumberItem 1.
    
    Financial Statements:Statements of Financial Condition at September 30, 2010 (unaudited) and December 31, 2009
    
    3Statements of Income and Expenses and Changes in Partners Capital for the three and nine
months ended September 30, 2010 and 2009 (unaudited)
    
    4Notes to Financial Statements, including the Financial Statements of CMF Graham
Capital Master Fund L.P. (unaudited)
    
    519Item 2.
    
    Managements Discussion and Analysis of Financial Condition and Results of Operations
    
    2022Item 3.
    
    Quantitative and Qualitative Disclosures about Market Risk
    
    2324Item 4.
    
    Controls and Procedures
    
    25PART II - Other Information
    
    26Exhibits31.1 Certification31.2 Certification32.1 Certification32.2 CertificationEX-31.1EX-31.2EX-32.1EX-32.2
  2




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##### Table of Contents



PART I
 
 Item 1. Financial Statements
 Fairfield Futures Fund L.P. II
 
 Statements of Financial Condition
 (Unaudited)
September 30,
    
    
    December 31,2010
    
    
    2009Assets:Investment in Master, at fair value
    
    $
    42,104,935
    
    
    $
    44,070,980Cash
    
    
    97,120
    
    
    
    103,564Total assets
    
    $
    42,202,055
    
    
    $
    44,174,544Liabilities and Partners Capital:Liabilities:Accrued expenses:Brokerage fees
    
    $
    158,258
    
    
    $
    165,655Management fees
    
    
    69,974
    
    
    
    73,303Administrative fees
    
    
    17,494
    
    
    
    18,326Other
    
    
    59,136
    
    
    
    27,194Redemptions payable
    
    
    116,538
    
    
    
    524,840Total liabilities
    
    
    421,400
    
    
    
    809,318Partners Capital:General Partner, 546.3187 and 1,250.2679 unit
equivalents outstanding at September  30, 2010 and
December 31, 2009, respectively
    
    
    558,671
    
    
    
    1,339,800Special
Limited Partner, 442.4015 units outstanding at September 30, 2010 and December 31,
2009
    
    
    452,404
    
    
    
    474,082Limited
Partners, 39,868.0522 and 38,774.5548
Redeemable Units
outstanding at September 30, 2010 and December 31,
2009, respectively
    
    
    40,769,580
    
    
    
    41,551,344Total partners capital
    
    
    41,780,655
    
    
    
    43,365,226Total liabilities and partners capital
    
    $
    42,202,055
    
    
    $
    44,174,544Net asset value per unit
    
    $
    1,022.61
    
    
    $
    1,071.61
  3




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##### Table of Contents



Fairfield Futures Fund L.P. II
 
 Statements of Income and Expenses and Changes in Partners Capital
(Unaudited)
 Three Months Ended
    
    
    Nine Months EndedSeptember 30,
    
    
    September 30,2010
    
    
    2009
    
    
    2010
    
    
    2009Income:Net realized gains (losses) on closed contracts allocated from Master
    
    $
    (136,394
    )
    
    $
    2,388,238
    
    
    $
    (373,594
    )
    
    $
    2,087,765Change in net unrealized gains (losses) on open contracts allocated from Master
    
    
    1,564,039
    
    
    
    1,366,465
    
    
    
    882,177
    
    
    
    741,038Interest income allocated from Master
    
    
    10,868
    
    
    
    9,332
    
    
    
    25,806
    
    
    
    28,752Expenses allocated from Master
    
    
    (33,221
    )
    
    
    (54,634
    )
    
    
    (103,853
    )
    
    
    (129,505
    )Total income (loss)
    
    
    1,405,292
    
    
    
    3,709,401
    
    
    
    430,536
    
    
    
    2,728,050Expenses:Brokerage fees
    
    
    463,219
    
    
    
    490,169
    
    
    
    1,379,323
    
    
    
    1,543,758Management fees
    
    
    204,946
    
    
    
    216,968
    
    
    
    610,372
    
    
    
    682,783Administrative fees
    
    
    51,237
    
    
    
    54,242
    
    
    
    152,594
    
    
    
    170,695Other
    
    
    129,628
    
    
    
    35,694
    
    
    
    262,050
    
    
    
    97,945Total expenses
    
    
    849,030
    
    
    
    797,073
    
    
    
    2,404,339
    
    
    
    2,495,181Net income (loss) before allocation to Special Limited Partner
    
    
    556,262
    
    
    
    2,912,328
    
    
    
    (1,973,803
    )
    
    
    232,869Allocation to Special Limited Partner
    
    
    
    
    
    
    (64,276
    )
    
    
    
    
    
    
    (64,276
    )Net income (loss) after allocation to Special Limited Partner
    
    
    556,262
    
    
    
    2,848,052
    
    
    
    (1,973,803
    )
    
    
    168,593Additions  Limited Partners
    
    
    2,494,500
    
    
    
    1,155,000
    
    
    
    5,950,500
    
    
    
    2,401,000Additions  Special Limited Partner
    
    
    
    
    
    
    64,276
    
    
    
    
    
    
    
    64,276Redemptions  General Partner
    
    
    
    
    
    
    
    
    
    
    (700,077
    )
    
    
    Redemptions  Limited Partners
    
    
    (633,772
    )
    
    
    (2,390,685
    )
    
    
    (4,861,191
    )
    
    
    (10,850,768
    )Redemptions  Special Limited Partner
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (1,250,000
    )Net increase (decrease) in Partners Capital
    
    
    2,416,990
    
    
    
    1,676,643
    
    
    
    (1,584,571
    )
    
    
    (9,466,899
    )Partners Capital, beginning of period
    
    
    39,363,665
    
    
    
    41,658,030
    
    
    
    43,365,226
    
    
    
    52,801,572Partners Capital, end of period
    
    $
    41,780,655
    
    
    $
    43,334,673
    
    
    $
    41,780,655
    
    
    $
    43,334,673Net asset value per  unit (40,856.7724 and 40,027.3584
 units outstanding at September 30, 2010 and 2009, respectively)
    
    $
    1,022.61
    
    
    $
    1,082.63
    
    
    $
    1,022.61
    
    
    $
    1,082.63Net income (loss) per Redeemable Unit
and General Partner unit equivalents
    
    $
    13.17
    
    
    $
    69.79
    
    
    $
    (49.00
    )
    
    $
    6.42Weighted average units outstanding
    
    
    40,401.0679
    
    
    
    41,070.2700
    
    
    
    40,037.1669
    
    
    
    43,125.8429
  4




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##### Table of Contents



Fairfield Futures Fund L.P. II
 
 Notes to Financial Statements
September 30, 2010
(Unaudited)
 1.   General:
         5




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##### Table of Contents



Fairfield Futures Fund L.P. II
Notes to Financial Statements
September 30, 2010
(Unaudited)
    6




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##### Table of Contents



Fairfield Futures Fund L.P. II
Notes to Financial Statements
September 30, 2010
(Unaudited)
  CMF Graham Capital Master Fund L.P.
Statements of Financial Condition
 (Unaudited)
September 30,
    
    
    December 31,2010
    
    
    2009Assets:Equity in trading account:Cash
    
    $
    145,493,183
    
    
    $
    153,765,196Cash margin
    
    
    22,687,512
    
    
    
    15,503,558Net unrealized appreciation on open futures contracts
    
    
    3,184,575
    
    
    
    406,652Net
unrealized appreciation on open forward contracts
    
    
    3,196,458
    
    
    
    1,562,793Total assets
    
    $
    174,561,728
    
    
    $
    171,238,199Liabilities and Partners Capital:Liabilities:Accrued expenses:Professional fees
    
    $
    46,918
    
    
    $
    25,939Total liabilities
    
    
    46,918
    
    
    
    25,939Partners Capital:General
Partner, 0.0000 unit equivalents at September 30, 2010 and December 31, 2009
    
    
    
    
    
    
    Limited
Partners, 105,162.7220 and 104,371.4673 units outstanding at September 30, 2010 and December 31, 2009,
respectively
    
    
    174,514,810
    
    
    
    171,212,260Total liabilities and partners capital
    
    $
    174,561,728
    
    
    $
    171,238,199Net asset value per unit
    
    $
    1,659.47
    
    
    $
    1,640.41
 7




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##### Table of Contents



Fairfield Futures Fund L.P. II
Notes to Financial Statements
September 30, 2010
(Unaudited)
 CMF Graham Capital Master Fund L.P.
Condensed Schedule of Investments
September 30, 2010
 (Unaudited)
 Notional ($)/ Number of
    
    
    
    
    
    
    % of PartnersContracts
    
    
    Fair Value
    
    
    CapitalFutures Contracts PurchasedCurrencies
    
    
    154
    
    
    $
    182,018
    
    
    
    0.10
    %Energy
    
    
    554
    
    
    
    1,715,694
    
    
    
    0.98Grains
    
    
    415
    
    
    
    636,825
    
    
    
    0.37Indices
    
    
    1,930
    
    
    
    (125,792
    )
    
    
    (0.07
    )Interest Rates U.S.
    
    
    2,284
    
    
    
    1,206,084
    
    
    
    0.69Interest Rates Non-U.S.
    
    
    519
    
    
    
    106,885
    
    
    
    0.06Livestock
    
    
    87
    
    
    
    (17,948
    )
    
    
    (0.01
    )Metals
    
    
    181
    
    
    
    759,756
    
    
    
    0.44Softs
    
    
    87
    
    
    
    56,653
    
    
    
    0.03Total futures contracts purchased
    
    
    
    
    
    
    4,520,175
    
    
    
    2.59Futures
Contracts SoldCurrencies
    
    
    141
    
    
    
    314,474
    
    
    
    0.18Energy
    
    
    715
    
    
    
    (1,448,107
    )
    
    
    (0.83
    )Grains
    
    
    24
    
    
    
    (43,800
    )
    
    
    (0.02
    )Indices
    
    
    45
    
    
    
    (8,020
    )
    
    
    (0.00
    )*Interest Rates U.S.
    
    
    57
    
    
    
    (100,778
    )
    
    
    (0.06
    )Interest Rates Non-U.S.
    
    
    668
    
    
    
    (47,148
    )
    
    
    (0.03
    )Softs
    
    
    12
    
    
    
    (2,221
    )
    
    
    (0.00
    )*Total futures contracts sold
    
    
    
    
    
    
    (1,335,600
    )
    
    
    (0.76
    )Unrealized Appreciation on Open Forward ContractsCurrencies
    
    $
    616,429,550
    
    
    
    11,666,941
    
    
    
    6.69Metals
    
    
    192
    
    
    
    1,227,199
    
    
    
    0.70Total unrealized appreciation on open forward contracts
    
    
    
    
    
    
    12,894,140
    
    
    
    7.39Unrealized Depreciation on Open Forward ContractsCurrencies
    
    $
    524,732,471
    
    
    
    (9,206,087
    )
    
    
    (5.28
    )Metals
    
    
    106
    
    
    
    (491,595
    )
    
    
    (0.28
    )Total unrealized depreciation on open forward contracts
    
    
    
    
    
    
    (9,697,682
    )
    
    
    (5.56
    )Total fair value
    
    
    
    
    
    $
    6,381,033
    
    
    
    3.66
    %
 *
    
    Due to rounding. 8




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Fairfield Futures Fund L.P. II
Notes to Financial Statements
September 30, 2010
(Unaudited)
 CMF Graham Capital Master Fund L.P.
Condensed Schedule of Investments
December 31, 2009
  Notional ($)/Number of





% of PartnersContracts


Fair Value


CapitalFutures Contracts PurchasedCurrencies


2


$
360



0.00
%*Energy


449



242,192



0.14Grains


286



34,342



0.02Indices


1,065



633,603



0.37Interest Rates U.S.


233



(94,262
)


(0.06
)Interest Rates
    Non-U.S.


1,523



(996,822
)


(0.58
)Livestock


74



20,482



0.01Metals


78



(100,473
)


(0.06
)Softs


589



556,321



0.33Total futures contracts purchased






295,743



0.17Futures Contracts SoldCurrencies


69



11,480



0.01Energy


308



(40,301
)


(0.02
)Grains


275



57,491



0.03Indices


7



6,437



0.00
*Interest Rates U.S.


50



(406
)


(0.00
)*Interest Rates
    Non-U.S.


451



57,808



0.03Metals


10



18,400



0.01Total futures contracts sold






110,909



0.06Unrealized Appreciation on Open Forward ContractsCurrencies

$
550,199,867



7,739,782



4.52Metals


429



2,324,147



1.36Total unrealized appreciation on open forward contracts






10,063,929



5.88Unrealized Depreciation on Open Forward ContractsCurrencies

$
551,949,465



(7,486,471
)


(4.37
)Metals


285



(1,014,665
)


(0.59
)Total unrealized depreciation on open forward contracts






(8,501,136
)


(4.96
)Total fair value





$
1,969,445



1.15
% *
    
    Due to rounding.
 9




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##### Table of Contents



Fairfield Futures Fund L.P. II
Notes to Financial Statements
September 30, 2010
(Unaudited)
 CMF Graham Capital Master Fund L.P.
Statements of Income and Expenses and Changes in Partners Capital
(Unaudited)
  Three Months Ended
    
    
    Nine Months EndedSeptember 30,
    
    
    September 30,2010
    
    
    2009
    
    
    2010
    
    
    2009Income:Net gains (losses) on trading of commodity interests:Net realized gains (losses) on closed contracts
    
    $
    (740,880
    )
    
    $
    9,133,036
    
    
    $
    (1,476,833
    )
    
    $
    8,070,799Change in net unrealized gains (losses) on open
contracts
    
    
    6,661,117
    
    
    
    5,280,884
    
    
    
    4,411,588
    
    
    
    2,755,884Gain (loss) from trading, net
    
    
    5,920,237
    
    
    
    14,413,920
    
    
    
    2,934,755
    
    
    
    10,826,683Interest income
    
    
    45,847
    
    
    
    35,768
    
    
    
    109,312
    
    
    
    115,570Total income (loss)
    
    
    5,966,084
    
    
    
    14,449,688
    
    
    
    3,044,067
    
    
    
    10,942,253Expenses:Clearing fees
    
    
    127,589
    
    
    
    199,492
    
    
    
    353,131
    
    
    
    485,767Professional fees
    
    
    12,173
    
    
    
    10,003
    
    
    
    85,447
    
    
    
    26,779Total expenses
    
    
    139,762
    
    
    
    209,495
    
    
    
    438,578
    
    
    
    512,546Net income (loss)
    
    
    5,826,322
    
    
    
    14,240,193
    
    
    
    2,605,489
    
    
    
    10,429,707Additions  Limited Partners
    
    
    2,494,500
    
    
    
    1,160,932
    
    
    
    39,097,697
    
    
    
    3,407,251Redemptions  Limited Partners
    
    
    (6,525,987
    )
    
    
    (13,332,649
    )
    
    
    (38,291,324
    )
    
    
    (70,189,637
    )Distribution of interest income to feeder funds
    
    
    (45,847
    )
    
    
    (35,768
    )
    
    
    (109,312
    )
    
    
    (115,570
    )Net increase (decrease) in Partners Capital
    
    
    1,748,988
    
    
    
    2,032,708
    
    
    
    3,302,550
    
    
    
    (56,468,249
    )Partners Capital, beginning of period
    
    
    172,765,822
    
    
    
    165,989,985
    
    
    
    171,212,260
    
    
    
    224,490,942Partners Capital, end of period
    
    $
    174,514,810
    
    
    $
    168,022,693
    
    
    $
    174,514,810
    
    
    $
    168,022,693Net asset value per unit
(105,162.7220 and 103,297.2785 units outstanding at September 30,
2010 and 2009, respectively)
    
    $
    1,659.47
    
    
    $
    1,626.59
    
    
    $
    1,659.47
    
    
    $
    1,626.59Net income (loss) per unit
    
    $
    54.96
    
    
    $
    135.03
    
    
    $
    20.07
    
    
    $
    98.19Weighted average units outstanding
    
    
    107,459.7102
    
    
    
    108,885.8333
    
    
    
    109,912.6875
    
    
    
    123,360.1094
 10




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##### Table of Contents



Fairfield Futures Fund L.P. II
Notes to Financial Statements
September 30, 2010
(Unaudited)
 2.   Financial Highlights:
  Three Months Ended
    
    
    Nine Months EndedSeptember 30,
    
    
    September 30,2010
    
    
    2009
    
    
    2010
    
    
    2009Net realized and unrealized gains (losses) *
    
    $
    22.50
    
    
    $
    78.71
    
    
    $
    (23.57
    )
    
    $
    29.50Interest income
    
    
    0.27
    
    
    
    0.23
    
    
    
    0.64
    
    
    
    0.68Expenses **
    
    
    (9.60
    )
    
    
    (9.15
    )
    
    
    (26.07
    )
    
    
    (23.76
    )Increase (decrease) for the period
    
    
    13.17
    
    
    
    69.79
    
    
    
    (49.00
    )
    
    
    6.42Net asset value per unit, beginning of period
    
    
    1,009.44
    
    
    
    1,012.84
    
    
    
    1,071.61
    
    
    
    1,076.21Net asset value per unit, end of period
    
    $
    1,022.61
    
    
    $
    1,082.63
    
    
    $
    1,022.61
    
    
    $
    1,082.63
 *
    
    Includes Partnership brokerage fees and clearing fees allocated from Master.**
    
    Excludes Partnership brokerage fees and clearing fees allocated from Master.
 Three Months Ended
    
    
    Nine Months EndedSeptember 30,
    
    
    September 30,2010
    
    
    2009
    
    
    2010
    
    
    2009Ratios to average net assets:***Net investment income (loss) before allocation to
Special Limited Partner****
    
    
    (8.6
    )%
    
    
    (7.9
    )%
    
    
    (8.2
    )%
    
    
    (7.7
    )%Operating expenses
    
    
    8.7
    %
    
    
    8.0
    %
    
    
    8.3
    %
    
    
    7.8
    %Allocation to Special Limited Partner
    
    
    
    %
    
    
    0.2
    %
    
    
    
    %
    
    
    0.1
    %Total expenses
    
    
    8.7
    %
    
    
    8.2
    %
    
    
    8.3
    %
    
    
    7.9
    %Total return:Total return before allocation to Special
Limited Partner
    
    
    1.3
    %
    
    
    7.1
    %
    
    
    (4.6
    )%
    
    
    0.8
    %Allocation to Special Limited Partner
    
    
    
    %
    
    
    (0.2
    )%
    
    
    
    %
    
    
    (0.2
    )%Total return after allocation to Special
Limited Partner
    
    
    1.3
    %
    
    
    6.9
    %
    
    
    (4.6
    )%
    
    
    0.6
    %
 ***
    
    Annualized (except for allocation to Special Limited Partner, if applicable).****
    
    Interest income allocated from Master less total expenses.
  11




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##### Table of Contents



Fairfield Futures Fund L.P. II
Notes to Financial Statements
September 30, 2010
(Unaudited)
  Three Months Ended
    
    
    Nine Months EndedSeptember 30,
    
    
    September 30,2010
    
    
    2009
    
    
    2010
    
    
    2009Net realized and unrealized gains (losses) *
    
    $
    54.65
    
    
    $
    134.78
    
    
    $
    19.86
    
    
    $
    97.43Interest income
    
    
    0.43
    
    
    
    0.34
    
    
    
    1.01
    
    
    
    0.99Expenses **
    
    
    (0.12
    )
    
    
    (0.09
    )
    
    
    (0.80
    )
    
    
    (0.23
    )Increase (decrease) for the period
    
    
    54.96
    
    
    
    135.03
    
    
    
    20.07
    
    
    
    98.19Distribution of interest income to feeder funds
    
    
    (0.43
    )
    
    
    (0.34
    )
    
    
    (1.01
    )
    
    
    (0.99
    )Net asset value per unit, beginning of period
    
    
    1,604.94
    
    
    
    1,491.90
    
    
    
    1,640.41
    
    
    
    1,529.39Net asset value per unit, end of period
    
    $
    1,659.47
    
    
    $
    1,626.59
    
    
    $
    1,659.47
    
    
    $
    1,626.59
 *
    
    Includes clearing fees.**
    
    Excludes clearing fees.
 Three Months Ended
    
    
    Nine Months EndedSeptember 30,
    
    
    September 30,2010
    
    
    2009
    
    
    2010
    
    
    2009Ratios to average net assets:***Net investment income (loss)****
    
    
    (0.2
    )%
    
    
    (0.4
    )%
    
    
    (0.3
    )%
    
    
    (0.3
    )%Operating expenses
    
    
    0.3
    %
    
    
    0.5
    %
    
    
    0.3
    %
    
    
    0.4
    %Total return
    
    
    3.4
    %
    
    
    9.0
    %
    
    
    1.2
    %
    
    
    6.4
    %
 ***
    
    Annualized.****
    
    Interest income less total expenses.
  3.   Trading Activities:
    12




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##### Table of Contents



Fairfield Futures Fund L.P. II
Notes to Financial Statements
September 30, 2010
(Unaudited)
  September 30, 2010AssetsFutures ContractsCurrencies
    
    $
    510,836Energy
    
    
    2,105,459Grains
    
    
    748,581Indices
    
    
    737,411Interest Rates U.S.
    
    
    1,217,686Interest Rates Non-U.S.
    
    
    224,295Livestock
    
    
    7,946Metals
    
    
    768,666Softs
    
    
    115,858Total unrealized appreciation on open futures
contracts
    
    $
    6,436,738LiabilitiesFutures ContractsCurrencies
    
    $
    (14,344
    )Energy
    
    
    (1,837,872
    )Grains
    
    
    (155,556
    )Indices
    
    
    (871,223
    )Interest Rates U.S.
    
    
    (112,380
    )Interest Rates Non-U.S.
    
    
    (164,558
    )Livestock
    
    
    (25,894
    )Metals
    
    
    (8,910
    )Softs
    
    
    (61,426
    )Total unrealized depreciation on open futures
contracts
    
    $
    (3,252,163
    )Net unrealized appreciation on open futures contracts
    
    $
    3,184,575
    *AssetsForward ContractsCurrencies
    
    $
    11,666,941Metals
    
    
    1,227,199Total unrealized appreciation on open forward
contracts
    
    $
    12,894,140LiabilitiesForward ContractsCurrencies
    
    $
    (9,206,087
    )Metals
    
    
    (491,595
    )Total unrealized depreciation on open forward
contracts
    
    $
    (9,697,682
    )Net unrealized appreciation on open forward contracts
    
    $
    3,196,458
    **
 
 *
    
    This amount is in Net unrealized appreciation on open
futures contracts on the Masters Statements of Financial Condition.**
    
    This amount is in Net unrealized appreciation on open
forward contracts on the Masters Statements of Financial Condition.
 13




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##### Table of Contents



Fairfield Futures Fund L.P. II
Notes to Financial Statements
September 30, 2010
(Unaudited)
 December 31, 2009AssetsFutures ContractsCurrencies

$
29,498Energy


357,695Grains


223,296Indices


871,966Interest Rates U.S.


10,273Interest Rates
    Non-U.S.


169,828Livestock


20,482Metals


93,687Softs


810,673Total unrealized appreciation on open futures contracts

$
2,587,398LiabilitiesFutures ContractsCurrencies

$
(17,658
)Energy


(155,804
)Grains


(131,463
)Indices


(231,926
)Interest Rates U.S.


(104,941
)Interest Rates
    Non-U.S.


(1,108,842
)Metals


(175,760
)Softs


(254,352
)Total unrealized depreciation on open futures contracts

$
(2,180,746
)Net unrealized appreciation on open futures contracts

$
406,652
*AssetsForward ContractsCurrencies

$
7,739,782Metals


2,324,147Total unrealized appreciation on open forward contracts

$
10,063,929LiabilitiesForward ContractsCurrencies

$
(7,486,471
)Metals


(1,014,665
)Total unrealized depreciation on open forward contracts

$
(8,501,136
)Net unrealized appreciation on open forward contracts

$
1,562,793
** 
 *
    
    This amount is in Net unrealized appreciation on open
    futures contracts on the Masters Statements of
    Financial Condition.**
    

     This amount is in Net unrealized appreciation on open
    forward contracts on the Masters Statements of
    Financial Condition.  Three Months
Ended
    
    
    Three Months
Ended
    
    
    Nine Months
Ended
    
    
    Nine Months
EndedSeptember 30, 2010
    
    
    September 30, 2009
    
    
    September 30, 2010
    
    
    September 30, 2009Sector
    
    Gain (loss)
from trading
    
    
    Gain (loss)
from trading
    
    
    Gain (loss)
from trading
    
    
    Gain (loss)
from tradingCurrencies
    
    $
    2,843,763
    
    
    $
    2,213,542
    
    
    $
    2,015,271
    
    
    $
    2,159,237Energy
    
    
    (423,279
    )
    
    
    (1,878,912
    )
    
    
    (3,570,420
    )
    
    
    (2,370,625
    )Grains
    
    
    (280,747
    )
    
    
    827,204
    
    
    
    (900,830
    )
    
    
    165,543Indices
    
    
    (2,848,678
    )
    
    
    12,194,323
    
    
    
    (8,673,065
    )
    
    
    12,164,274Interest Rates U.S.
    
    
    3,597,053
    
    
    
    (1,012,589
    )
    
    
    6,207,599
    
    
    
    (1,130,233
    )Interest Rates Non-U.S.
    
    
    335,741
    
    
    
    (1,597,156
    )
    
    
    8,579,930
    
    
    
    (1,475,093
    )Livestock
    
    
    43,716
    
    
    
    (87,234
    )
    
    
    246,086
    
    
    
    60,384Metals
    
    
    2,024,030
    
    
    
    1,718,408
    
    
    
    445,341
    
    
    
    223,297Softs
    
    
    628,638
    
    
    
    2,036,334
    
    
    

(1,415,157
    )
    
    
    1,029,899Total
    
    $
    5,920,237
    ***
    
    $
    14,413,920
    ***
    
    $
    2,934,755
    ***
    
    $
    10,826,683
    ***
 
 ***
    
    This amount is in Gain (loss) from trading, net on the Masters Statements of Income and
Expenses and Changes in Partners Capital. 14




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##### Table of Contents



Fairfield Futures Fund L.P. II
Notes to Financial Statements
September 30, 2010
(Unaudited)
 4.   Fair Value Measurement:
 Partnerships Investments.
 Partnerships Fair Value Measurements.
   Quoted Prices in
    
    
    
    
    
    
    SignificantActive Markets
    
    
    Significant Other
    
    
    Unobservablefor Identical
    
    
    Observable Inputs
    
    
    Inputs9/30/2010
    
    
    Assets (Level 1)
    
    
    (Level 2)
    
    
    (Level 3)AssetsInvestment in MasterTotal fair value
    
    $
    42,104,935
    
    
    $
    
    
    
    $
    42,104,935
    
    
    $
    $
    42,104,935
    
    
    $
    
    
    
    $
    42,104,935
    
    
    $
    Quoted Prices inActive Markets
    
    
    Significant Other
    
    
    Significantfor Identical
    
    
    Observable Inputs
    
    
    Unobservable12/31/2009
    
    
    Assets (Level 1)
    
    
    (Level 2)
    
    
    Inputs (Level 3)AssetsInvestment in Master
    
    $
    44,070,980
    
    
    $
    
    
    
    $
    44,070,980
    
    
    $
    Total fair value
    
    $
    44,070,980
    
    
    $
    
    
    
    $
    44,070,980
    
    
    $
    
 15




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##### Table of Contents



Fairfield Futures Fund L.P. II
Notes to Financial Statements
September 30, 2010
(Unaudited)
 Masters Investments.
 Masters Fair Value Measurements.
  Quoted Prices inActive Markets
    
    
    Significant Other
    
    
    Significantfor Identical
    
    
    Observable Inputs
    
    
    Unobservable9/30/2010
    
    

Assets (Level 1)
    
    

(Level
2)
    
    

Inputs (Level 3)AssetsFutures
    
    $
    3,184,575
    
    
    $
    3,184,575
    
    
    $
    
    
    
    $
    Forwards
    
    
    3,196,458
    
    
    
    735,604
    
    
    
    2,460,854
    
    
    
    Total assets
    
    
    6,381,033
    
    
    
    3,920,179
    
    
    
    2,460,854
    
    
    
    Total fair value
    
    $
    6,381,033
    
    
    $
    3,920,179
    
    
    $
    2,460,854
    
    
    $
    Quoted Prices inActive Markets
    
    
    Significant Other
    
    
    Significantfor Identical
    
    
    Observable Inputs
    
    
    Unobservable12/31/2009
    
    

Assets (Level 1)
    
    

(Level
2)
    
    

Inputs (Level 3)AssetsFutures
    
    $
    406,652
    
    
    $
    406,652
    
    
    $
    
    
    
    $
    Forwards
    
    
    1,562,793
    
    
    
    1,309,482
    
    
    
    253,311
    
    
    
    Total assets
    
    
    1,969,445
    
    
    
    1,716,134
    
    
    
    253,311
    
    
    
    Total fair value
    
    $
    1,969,445
    
    
    $
    1,716,134
    
    
    $
    253,311
    
    
    $
    
 16




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##### Table of Contents



Fairfield Futures Fund L.P. II
Notes to Financial Statements
September 30, 2010
(Unaudited)
 5.   Financial Instrument Risks:
      17




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##### Table of Contents



Fairfield Futures Fund L.P. II

Notes to Financial Statements
September 30, 2010
(Unaudited)
 6.    Critical Accounting Policies
 Use of Estimates
 Statement of Cash Flows
 Partnerships Investments
 Partnerships and the Masters Fair Value Measurements
   Futures Contracts
 Forward Foreign Currency Contracts
  18




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##### Table of Contents



Fairfield Futures Fund L.P. II
Notes to Financial Statements
September 30, 2010
(Unaudited)
 London Metals Exchange Forward Contracts
 Income Taxes
   Subsequent Events
 Recent Accounting Pronouncements
  Net
Income (Loss) per Redeemable Unit and General Partner Unit Equivalents
 7. Subsequent Event:
  19




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##### Table of Contents



Item 2.
    Managements Discussion and Analysis of Financial Condition and Results of
Operations.
 Liquidity and Capital Resources
      Critical Accounting Policies
 Partnerships Investments
 Partnerships and the Masters Fair Value Measurements
   Futures Contracts
 20




---



##### Table of Contents



Forward Foreign Currency Contracts
  London Metals Exchange Forward Contracts
 Results of Operations
       21




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22




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##### Table of Contents



Item 3.
    Quantitative and Qualitative Disclosures about Market Risk
       23




---



##### Table of Contents



September 30, 2010
(Unaudited)
 Three Months Ended September 30, 2010% of Total
    
    
    High
    
    
    Low
    
    
    AverageMarket Sector
    

Value at Risk
    
    

Capitalization
    
    

Value at Risk
    
    

Value
at Risk
    
    

Value at Risk*Currencies
    
    $
    8,922,437
    
    
    
    5.12
    %
    
    $
    8,922,437
    
    
    $
    996,231
    
    
    $
    6,525,133Energy
    
    
    1,320,584
    
    
    
    0.76
    %
    
    
    1,989,347
    
    
    
    513,863
    
    
    
    1,374,939Grains
    
    
    461,350
    
    
    
    0.26
    %
    
    
    524,700
    
    
    
    124,875
    
    
    
    334,678Interest Rates U.S.
    
    
    1,859,010
    
    
    
    1.07
    %
    
    
    2,021,410
    
    
    
    814,575
    
    
    
    1,729,998Interest Rates Non-U.S.
    
    
    967,199
    
    
    
    0.55
    %
    
    
    4,016,393
    
    
    
    858,050
    
    
    
    2,142,697Livestock
    
    
    73,950
    
    
    
    0.04
    %
    
    
    74,200
    
    
    
    1,400
    
    
    
    48,683Metals
    
    
    1,291,316
    
    
    
    0.74
    %
    
    
    1,611,112
    
    
    
    731,751
    
    
    
    1,086,730Softs
    
    
    248,433
    
    
    
    0.14
    %
    
    
    558,957
    
    
    
    248,433
    
    
    
    290,765Indices
    
    
    8,412,921
    
    
    
    4.82
    %
    
    
    8,412,921
    
    
    
    1,137,775
    
    
    
    3,918,076Total
    
    $
    23,557,200
    
    
    
    13.50
    %
 
 *
    
    Average month end Values at Risk. 24




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##### Table of Contents



Item 4.
    Controls and Procedures
    internal control over financial reporting
 
    
    pertain to the maintenance of records that in reasonable detail accurately and fairly reflect
the transactions and dispositions of the assets of the Partnership;
 
    
    provide reasonable assurance that (i) transactions are recorded as necessary to permit
preparation of financial statements in accordance with GAAP, and (ii) the Partnerships
receipts are handled and expenditures are made only pursuant to authorizations of the General
Partner; and
 
    
    provide reasonable assurance regarding prevention or timely detection of unauthorized
acquisition, use or disposition of the Partnerships assets that could have a material effect
on the financial statements.
  25




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##### Table of Contents



PART II. OTHER INFORMATION
 Item 1.
    Legal Proceedings
  26




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##### Table of Contents



Item 1A.
    Risk Factors
  Item 2.
    Unregistered Sales of Equity Securities and Use of Proceeds
    (d) Maximum Number(or Approximate(c) Total Number
    
    
    Dollar Value) of(b) Average
    
    
    of Redeemable Units
    
    
    Redeemable Units that(a) Total Number
    
    
    Price Paid
    
    
    Purchased as Part
    
    
    May Yet Beof Redeemable
    
    
    per Redeemable
    
    
    of Publicly Announced
    
    
    Purchased Under thePeriod
    
    
    Units Purchased*
    
    
    Unit*
    
    
    Plans or Programs
    
    
    Plans or ProgramsJuly 1, 2010 July 31, 2010
    
    
    
    59.4135
    
    
    
    $
    994.52
    
    
    
    N/A
    
    
    N/AAugust 1, 2010 August 31, 2010
    
    
    
    449.3392
    
    
    
    $
    1,019.60
    
    
    
    N/A
    
    
    N/ASeptember 1, 2010 September 30, 2010
    
    
    
    113.9611
    
    
    
    $
    1,022.61
    
    
    
    N/A
    
    
    N/A622.7138
    
    
    
    $

1,017.76
    
    
    
    N/A
    
    
    N/A
   Item 3.
    Defaults Upon Senior Securities  None.
 Item 4.
    [Removed and Reserved]
 Item 5.
    Other Information  None.
 27




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##### Table of Contents



Item 6.
    Exhibits
 3.1
    
    Limited Partnership Agreement (filed as Exhibit 3.1 to the Registration Statement on Form
10 filed on April 29, 2005 and incorporated herein by reference).3.2
    
    Certificate of Limited Partnership of the Partnership as filed in the office of the
Secretary of State of the State of New York (filed as Exhibit 3.1 to the Registration
Statement on Form 10 filed on April 29, 2005 and incorporated herein by reference).
 (a)
    
    Certificate of Amendment to the Certificate of Limited Partnership as filed in the
office of the Secretary of State of New York, dated
September 21, 2005 (filed as Exhibit 3.2A to the Form 10-Q filed on November 16, 2009 and incorporated herein by reference).(b)
    
    Certificate of Amendment to the Certificate of Limited Partnership as filed in the
office of the Secretary of State of New York, dated September 19, 2008 (filed as Exhibit 3.2B to the Form 10-Q filed on November 16, 2009 and incorporated herein by reference).(c)
    
    Certificate of Amendment to the Certificate of Limited Partnership as filed in the
office of the Secretary of State of New York, dated September 28, 2009 (filed as Exhibit
99.1 to the Form 8-K filed on September 30, 2009 and incorporated herein by reference).(d)
    
    Certificate of Amendment of the Certificate of Limited Partnership as filed in the office of the Secretary of State of New York,
 dated June 29, 2010 (filed as Exhibit 3.2(d) to the Form 8-K filed on July 2, 2010 and incorporated herein by reference).
 10.1
    
    Customer Agreement between the Partnership and CGM (filed as Exhibit 10.2 to the
Registration Statement on Form 10 filed on April 29, 2005 and incorporated herein by
reference).10.2
    
    Form of Subscription Agreement (filed as Exhibit 10.4 to the Partnerships Form 10 filed on April 29, 2005 and incorporated herein by reference).10.3
    
    Escrow Instructions relating to escrow of subscription funds (filed as Exhibit 10.3 to
the Registration Statement on Form 10 filed on April 29, 2005 and incorporated herein by
reference).10.4
    
    Agency Agreement among the Partnership, the General Partner and CGM  (filed as Exhibit 10.3 to the Registration Statement on Form 10 filed on April 29, 2005
and incorporated herein by reference).
 (a)
    
    Joinder Agreement among the Partnership, the General Partner, CGM and Morgan Stanley Smith Barney LLC, dated June 1, 2009 (filed as Exhibit 10
to the Form 10-Q filed on August 14, 2009 and incorporated herein by reference).
 10.5
    
    Management Agreement among the Partnership, the General Partner and Graham
(filed as Exhibit 10.1 to the Registration Statement on Form 10 filed on April
29, 2005 and incorporated herein by reference).
 (a)
    
    Letter extending the Management Agreement between the General Partner and Graham
 for 2008 (filed as Exhibit 10.9 to the Form 10-K filed March 31,
2009 and incorporated herein by reference).
     
 28




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##### Table of Contents



SIGNATURES
   FAIRFIELD FUTURES FUND L.P. II
  By:

Ceres Managed Futures LLC(General Partner)By:

/s/ Walter DavisWalter Davis
    President and Director     By:

/s/ Jennifer MagroJennifer Magro
    Chief Financial Officer, Secretary and Director 
(Principal Accounting Officer)    29