Derivative Instruments

6 Months Ended

Apr. 30, 2015

Derivative Instruments [Abstract]

Derivative Instruments

DERIVATIVE INSTRUMENTS

As of April 30, 2015, the Company had entered into corn and ethanol derivative instruments, which are required to be recorded as either assets or liabilities at fair value in the balance sheet. The Company uses these instruments to manage risks from changes in market rates and prices. They are not used for speculative purposes. Derivatives qualify for treatment as hedges when there is a high correlation between the change in fair value of the derivative instrument and the related change in value of the underlying hedged item. The Company may designate the hedging instruments based upon the exposure being hedged as a fair value hedge, a cash flow hedge or a hedge against foreign currency exposure. The derivative instruments outstanding at April 30, 2015 are not designated as effective hedges for accounting purposes.

Commodity Contracts

As of April 30, 2015, the Company has open positions for 1,850,000 bushels of corn and 2,610,000 gallons of ethanol. Management expects all open positions outstanding as of April 30, 2015 to be realized within the next twelve months.

The following tables provide details regarding the Company's derivative instruments at April 30, 2015 and October 31, 2014:

Instrument	Balance Sheet location	April 30, 2015			October 31, 2014
Corn, natural gas and ethanol contracts
In gain position		$	3,875		$	—
In loss position		(601,117		)	(339,011		)
Deposits with broker		1,068,962			596,945
	Current assets	$	471,720		$	257,934

The following tables provide details regarding the gains (losses) from the Company's derivative instruments in the statements of operations, none of which are designated as hedging instruments:

	Statement of	Three Months Ended April 30,
	Operations location	2015		2014
Interest rate swap	Other income (expense)	$	—	$	244,662
Ethanol contracts	Revenues	2,494		(563,248		)
Corn contracts	Cost of goods sold	220,714		910,331
Natural gas contracts	Cost of goods sold	6,210		16,848

	Statement of	Six Months Ended April 30,
	Operations location	2015			2014
Interest rate swap	Other income (expense)	$	—		$	427,091
Ethanol contracts	Revenues	(32,458		)	(524,142		)
Corn contracts	Cost of goods sold	392,016			1,300,814
Natural gas contracts	Cost of goods sold	(35,573		)	(92,206		)