Derivative Instruments

12 Months Ended

Oct. 31, 2021

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Derivative Instruments

DERIVATIVE INSTRUMENTS

The Company enters into corn, ethanol and natural gas 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. 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 are not designated as effective hedges for accounting purposes.

Commodity Contracts

Management expects all open positions outstanding as of October 31, 2021 to be realized within the next twelve months.

The following tables provide details regarding the Company's derivative instruments at October 31:

Instrument	Balance Sheet location
		2021		2020
Corn, natural gas and ethanol contracts
In loss position		(915,027)		(889,750)
Deposits with broker		1,283,296		1,150,147
	Derivative instruments	$	368,269	$	260,397

These contracts and related deposits are subject to a master netting arrangements and, therefore, are presented on a net basis on the balance sheet.

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	Year Ended October 31
	Operations location	2021	2020	2019
Ethanol contracts	Revenues	953	(622,585)	(240,284)
Corn contracts	Cost of goods sold	352,596	(845,013)	(835,456)
Natural gas contracts	Cost of goods sold	24,428	11,240	21,833