Physical Commodities Inventory

3 Months Ended

Dec. 31, 2021

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


(in millions)	December 31, 2021		September 30, 2021
Physical Ag & Energy(1)	$	317.7	$	248.6
Precious metals - held by broker-dealer subsidiary	87.0		111.2
Precious metals - held by non-broker-dealer subsidiaries	119.2		87.7
Physical commodities inventory, net	$	523.9	$	447.5

(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 record changes to these values in Cost of sales of physical commodities on the Condensed Consolidated Income Statements.

In the ordinary course of business, the Company holds commodities inventory in third-party licensed grain facilities. As of December 31, 2021, the Company holds title, in the form of warehouse receipts, to approximately 2.8 million bushels of soybeans, valued at $34.7 million, in multiple facilities owned by one third-party operator. 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. The Company expects to receive bushels, or proceeds from bushels, sufficient to cover the 2.8 million bushels of soybeans inventory held at December 31, 2021; therefore, the Company has not recognized any estimated losses associated with this matter in its

December 31, 2021 condensed consolidated financial statements. 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 December 31, 2021, management believes that it is probable that the Company has adequate insurance coverage to cover potential shortfalls.