Fair Value Measurements

12 Months Ended

Oct. 31, 2019

FAIR VALUE MEASUREMENTS

Various inputs are considered when determining the value of financial instruments. The inputs or methodologies used for valuing financial instruments are not necessarily an indication of the risk associated with investing in these instruments. These inputs are summarized in the three broad levels listed below:


•	Level 1 inputs are quoted prices in active markets for identical assets or liabilities as of the reporting date. Active markets are those in which transactions for the asset or liability occur with sufficient frequency and volume to provide pricing information on an ongoing basis.


•	Level 2 inputs include the following:


◦	Quoted prices in active markets for similar assets or liabilities.


◦	Quoted prices in markets that are not active for identical or similar assets or liabilities.


◦	Inputs other than quoted prices that are observable for the asset or liability.


◦	Inputs that are derived primarily from or corroborated by observable market data by correlation or other means.


•	Level 3 inputs are unobservable inputs for the asset or liability.

The following table provides information on those assets (liabilities) measured at fair value on a recurring basis.



	Fair Value as of			Fair Value Measurement Using
	October 31, 2019			Level 1			Level 2			Level 3
Derivative instrument - commodities
In gain position	$	124,069		$	4,538		$	119,531		$	—
In loss position	$	(775,887	)	$	(4,375	)	$	(771,512	)	$	—



	Fair Value as of			Fair Value Measurement Using
	October 31, 2018			Level 1			Level 2			Level 3
Derivative instrument - commodities
In gain position	$	—		$	—		$	—		$	—
In loss position	$	(2,280,280	)	$	(37,485	)	$	(2,242,795	)	$	—

The Company determines the fair value of the commodities contracts by obtaining the fair value measurements from an independent pricing service based on dealer quotes and live trading levels from the Chicago Board of Trade.

- Definition

The entire disclosure for the fair value of financial instruments (as defined), including financial assets and financial liabilities (collectively, as defined), and the measurements of those instruments as well as disclosures related to the fair value of non-financial assets and liabilities. Such disclosures about the financial instruments, assets, and liabilities would include: (1) the fair value of the required items together with their carrying amounts (as appropriate); (2) for items for which it is not practicable to estimate fair value, disclosure would include: (a) information pertinent to estimating fair value (including, carrying amount, effective interest rate, and maturity, and (b) the reasons why it is not practicable to estimate fair value; (3) significant concentrations of credit risk including: (a) information about the activity, region, or economic characteristics identifying a concentration, (b) the maximum amount of loss the entity is exposed to based on the gross fair value of the related item, (c) policy for requiring collateral or other security and information as to accessing such collateral or security, and (d) the nature and brief description of such collateral or security; (4) quantitative information about market risks and how such risks are managed; (5) for items measured on both a recurring and nonrecurring basis information regarding the inputs used to develop the fair value measurement; and (6) for items presented in the financial statement for which fair value measurement is elected: (a) information necessary to understand the reasons for the election, (b) discussion of the effect of fair value changes on earnings, (c) a description of [similar groups] items for which the election is made and the relation thereof to the balance sheet, the aggregate carrying value of items included in the balance sheet that are not eligible for the election; (7) all other required (as defined) and desired information.

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