Physical Commodities Inventory

12 Months Ended

Sep. 30, 2021

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


	September 30,
(in millions)	2021		2020
Physical Ag & Energy(1)	$	248.6	$	201.5
Precious metals - held by broker-dealer subsidiary	111.2		14.2
Precious metals - held by non-broker-dealer subsidiaries	87.7		65.4
Physical commodities inventory	$	447.5	$	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. 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 includes energy related inventories, including primarily propane, gasoline, and kerosene. The Company records changes to these values in Cost of sales of physical commodities on the Consolidated Income Statements.

The Company has recorded lower of cost or net realizable value adjustments for certain precious metals and energies inventory of $3.5 million and $0.7 million as of September 30, 2021 and 2020, respectively. The adjustments are included in Cost of sales of physical commodities in the Consolidated Income Statements.

In the ordinary course of business, the Company holds commodities inventory in third-party licensed grain facilities. As of September 30, 2021, the Company held title in the form of warehouse receipts to approximately 2.6 million bushels of soybeans, valued at $31.2 million, in multiple facilities owned by one third-party operator. The amount of soybeans held at these third-party grain facilities increased to 2.8 million bushels on October 6, 2021 pursuant to the satisfaction of a

$2.5 million repurchase commitment. The Company’s ownership interest in the soybeans held at these third-party grain facilities is represented by warehouse receipts issued by these facilities under the U.S. Warehouse Act, which is a program administered by the USDA. On September 29, 2021, the above-mentioned third-party operator filed a petition for Chapter 11 bankruptcy, and a Chief Restructuring Officer was assigned by the court to assist in administering the allocation of the grain on hand and proceeds from the sale of processed soybean products. As a result of these bankruptcy proceedings, in the event the Company does not receive soybeans or proceeds from soybeans commensurate with the 2.8 million bushels of soybean inventory held at October 6, 2021, management believes that it is probable that the Company has adequate insurance coverage to cover potential shortfalls. Therefore, the Company has not recognized any estimated losses associated with this matter in its September 30, 2021 consolidated financial statements. During the year ended September 30, 2020, the Company recorded lower of cost or net realizable value adjustments for certain physical inventory of crude oil and low sulfur fuel oil primarily based on quality degradation and consideration of costs to sell of $7.6 million. The adjustments are included in Cost of sales of physical commodities in the Consolidated Income Statements. As of September 30, 2021, the Company continues to attempt to recover this write down from its supplier, however there is substantial uncertainty as to whether the Company will be successful. The Company continues to pursue all legal avenues available to it regarding this matter.