Physical Commodities Inventory

6 Months Ended

Mar. 31, 2021

The Company’s inventories consist of finished physical commodities as shown below.


(in millions)	March 31, 2021		September 30, 2020
Physical Ag & Energy(1)	$	261.8	$	201.5
Precious metals - held by broker-dealer subsidiary(2)	93.4		14.2
Precious metals - held by non-broker-dealer subsidiaries(3)	95.6		65.4
Physical commodities inventory, net	$	450.8	$	281.1

(1) Physical Ag & Energy consists of agricultural commodity inventories, including corn, soybeans, wheat, dried distillers grain, canola, sorghum, coffee, cocoa, cotton, and others. The agricultural commodity inventories are carried at net realizable value, which approximates selling prices in the ordinary course of business, less disposal costs, with changes in net realizable value included as a component of ‘cost of sales of physical commodities’ on the condensed consolidated income statements. The agricultural inventories have reliable, readily determinable and realizable market prices, have relatively insignificant costs of disposal and are available for immediate delivery. Physical Ag & Energy also consists of energy related inventories, including primarily propane, gasoline, and kerosene, which are valued at the lower of cost or net realizable value.

(2) Precious metals inventory held by the Company’s subsidiary, StoneX Financial Ltd, a United Kingdom ("UK") based broker-dealer, is measured at fair value, with changes in fair value included as a component of ‘principal gains, net’ on the condensed consolidated income statements, in accordance with U.S. GAAP accounting requirements for broker-dealers.

(3) Precious metals inventory held by subsidiaries that are not broker-dealers is valued at the lower of cost or net realizable value.

The Company has recorded lower of cost or net realizable adjustments for certain precious metals and energy inventory of $1.7 million and $0.7 million as of March 31, 2021 and September 30, 2020, respectively. The adjustments are included in ‘cost of sales of physical commodities’ in the condensed consolidated income statements.