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Fair Value Measurements
 9 Months Ended
Sep. 30, 2024
Fair Value Disclosures [Abstract]  
Fair Value Measurements Fair Value Measurements
The Company measures certain assets and liabilities in accordance with ASC Topic 820, Fair Value Measurements and Disclosures, which defines fair value as the price that would be received from the sale of an asset or paid to transfer a liability in an orderly transaction between market participants on the measurement date. In addition, it establishes a fair value hierarchy that prioritizes observable and unobservable inputs used to measure fair value into three broad levels:

Level 1 — Quoted prices in active markets that are accessible at the measurement date for identical assets and liabilities.
The fair value hierarchy gives the highest priority to Level 1 inputs.
Level 2 — Significant other observable inputs other than quoted prices in active markets.
Level 3 — Significant unobservable inputs for which there is little or no market data available. The fair value hierarchy gives
the lowest priority to Level 3 inputs.
The following tables set forth, by level, the Company’s assets and liabilities that were accounted for at fair value on a recurring basis as of September 30, 2024 and December 31, 2023 (in millions).

 Fair Value Measurements at September 30, 2024
 Level 1Level 2Level 3Total
Assets:    
Inventories carried at market$— $3,466 $2,628 $6,094 
Unrealized derivative gains:    
Commodity contracts— 488 476 964 
Foreign currency contracts— 167 — 167 
Interest rate contracts— 28 — 28 
Cash equivalents218 — — 218 
Segregated investments1,595 — — 1,595 
Total Assets$1,813 $4,149 $3,104 $9,066 
Liabilities:    
Unrealized derivative losses:    
Commodity contracts$— $452 $474 $926 
Foreign currency contracts— 222 — 222 
Inventory-related payables— 774 27 801 
Total Liabilities$— $1,448 $501 $1,949 

Fair Value Measurements at December 31, 2023
 Level 1Level 2Level 3Total
Assets:    
Inventories carried at market$— $4,274 $2,713 $6,987 
Unrealized derivative gains:    
Commodity contracts— 628 731 1,359 
Foreign currency contracts— 187 — 187 
Cash equivalents209 — — 209 
Segregated investments1,362 — — 1,362 
Total Assets$1,571 $5,089 $3,444 $10,104 
Liabilities:    
Unrealized derivative losses:    
Commodity contracts$— $500 $457 $957 
Foreign currency contracts— 144 — 144 
Inventory-related payables— 1,219 101 1,320 
Total Liabilities$— $1,863 $558 $2,421 

Inventories and inventory-related payables carried at market

Estimated fair values for inventories and inventory-related payables carried at market are based on exchange-quoted prices, adjusted for differences in local markets and quality, referred to as basis. Market valuations for the Company’s inventories are adjusted for location and quality (basis) because the exchange-quoted prices represent contracts with standardized terms for
commodity, quantity, future delivery period, delivery location, and commodity quality or grade. The basis adjustments are generally determined using the inputs from competitor and broker quotations or market transactions and are considered observable. Basis adjustments are impacted by specific local supply and demand characteristics at each facility and the overall market. Factors such as substitute products, weather, fuel costs, contract terms, and futures prices also impact the movement of these basis adjustments. In some cases, the basis adjustments are unobservable because they are supported by little to no market activity. When unobservable inputs have a significant impact (more than 10%) on the measurement of fair value, the inventory is classified in Level 3. Changes in the fair value of inventories and inventory-related payables are recognized in the Consolidated Statements of Earnings as a component of cost of products sold.

Unrealized derivative gains and losses

Derivative contracts include exchange-traded commodity futures and options contracts, forward commodity purchase and sale contracts, and over-the-counter (OTC) instruments related primarily to agricultural commodities, energy, interest rates, and foreign currencies. Substantially all of the Company’s exchange-traded commodity futures and options contracts are cash-settled on a daily basis and, therefore, are not included in these tables. Fair value for forward commodity purchase and sale contracts is estimated based on exchange-quoted prices adjusted for differences in local markets. Market valuations for the Company’s forward commodity purchase and sale contracts are adjusted for location (basis) because the exchange-quoted prices represent contracts that have standardized terms for commodity, quantity, future delivery period, delivery location, and commodity quality or grade. The basis adjustments are generally determined using inputs from competitor and broker quotations or market transactions and are considered observable. Basis adjustments are impacted by specific local supply and demand characteristics at each facility and the overall market. Factors such as substitute products, weather, fuel costs, contract terms, and futures prices also impact the movement of these basis adjustments. In some cases, the basis adjustments are unobservable because they are supported by little to no market activity. When observable inputs are available for substantially the full term of the contract, it is classified in Level 2. When unobservable inputs have a significant impact (more than 10%) on the measurement of fair value, the contract is classified in Level 3. Except for certain derivatives designated as cash flow hedges, changes in the fair value of commodity-related derivatives are recognized in the Consolidated Statements of Earnings as a component of cost of products sold. Changes in the fair value of foreign currency-related derivatives are recognized in the Consolidated Statements of Earnings as a component of revenues, cost of products sold, and other (income) expense - net, depending upon the purpose of the contract. The changes in the fair value of derivatives designated as effective cash flow hedges are recognized in the Consolidated Balance Sheets as a component of accumulated other comprehensive income (AOCI) until the hedged items are recorded in earnings or it is probable the hedged transaction will no longer occur.

Cash equivalents

The Company’s cash equivalents are comprised of money market funds valued using quoted market prices and are classified as Level 1.

Segregated investments

The Company’s segregated investments are comprised of U.S. Treasury securities. U.S. Treasury securities are valued using quoted market prices and are classified in Level 1.
The following table presents a roll forward of assets measured at fair value on a recurring basis using significant unobservable inputs (Level 3) during the three months ended September 30, 2024 (in millions).

 Level 3 Fair Value Asset Measurements at
September 30, 2024
 Inventories
 Carried at
 Market		Commodity
Derivative
Contracts
Gains
 
Total 
Assets
Opening balance, June 30, 2024$2,546 $395 $2,941 
Total increase (decrease) in net realized/unrealized gains included in cost of products sold*(92)215 123 
Purchases4,174 — 4,174 
Sales(3,736)— (3,736)
Settlements— (288)(288)
Transfers into Level 3265 158 423 
Transfers out of Level 3(529)(4)(533)
Closing Balance, September 30, 2024$2,628 $476 $3,104 
* Includes increase in unrealized gains of $436 million relating to Level 3 assets still held at September 30, 2024.

The following table presents a roll forward of liabilities measured at fair value on a recurring basis using significant unobservable inputs (Level 3) during the three months ended September 30, 2024 (in millions).


Level 3 Fair Value Liability Measurements at
 September 30, 2024
 Inventory-
 related
 Payables		Commodity
Derivative
Contracts
Losses
 
Total 
Liabilities
Opening balance, June 30, 2024$34 $367 $401 
Total increase (decrease) in net realized/unrealized losses included in cost of products sold*(3)343 340 
Purchases8 — 8 
Sales(12)— (12)
Settlements— (251)(251)
Transfers into Level 3— 22 22 
Transfers out of Level 3— (7)(7)
Closing Balance, September 30, 2024$27 $474 $501 
* Includes increase in unrealized losses of $346 million relating to Level 3 liabilities still held at September 30, 2024.
The following table presents a roll forward of assets measured at fair value on a recurring basis using significant unobservable inputs (Level 3) during the three months ended September 30, 2023 (in millions).
 Level 3 Fair Value Asset Measurements at
September 30, 2023
 Inventories
 Carried at
 Market		Commodity
Derivative
Contracts
Gains
 
Total 
Assets
Opening balance, June 30, 2023$2,859 $886 $3,745 
Total increase (decrease) in net realized/unrealized gains included in cost of products sold*135 330 465 
Purchases6,615 — 6,615 
Sales(6,539)— (6,539)
Settlements— (356)(356)
Transfers into Level 3336 49 385 
Transfers out of Level 3(534)(19)(553)
Closing balance, September 30, 2023$2,872 $890 $3,762 
* Includes increase in unrealized gains of $438 million relating to Level 3 assets still held at September 30, 2023.

The following table presents a roll forward of liabilities measured at fair value on a recurring basis using significant unobservable inputs (Level 3) during the three months ended September 30, 2023 (in millions).

Level 3 Fair Value Liability Measurements at
 September 30, 2023
 Inventory-
 related
 Payables		Commodity
Derivative
Contracts
Losses		Debt Conversion Option
 
Total 
Liabilities
Opening balance, June 30, 2023$65 $791 $— $856 
Total increase (decrease) in net realized/unrealized losses included in cost of products sold and interest expense*(3)290 — 287 
Purchases29 — — 29 
Settlements— (529)— (529)
Transfers into Level 3— 10 — 10 
Transfers out of Level 3(4)(13)— (17)
Closing balance, September 30, 2023$87 $549 $— $636 
* Includes increase in unrealized losses of $297 million relating to Level 3 liabilities still held at September 30, 2023.
The following table presents a roll forward of assets measured at fair value on a recurring basis using significant unobservable inputs (Level 3) during the nine months ended September 30, 2024 (in millions).

Level 3 Fair Value Asset Measurements at
 September 30, 2024
 Inventories
 Carried at
 Market		Commodity
Derivative
Contracts
Gains
 
Total 
Assets
Opening Balance, December 31, 2023$2,713 $731 $3,444 
Total increase (decrease) in net realized/unrealized gains included in cost of products sold*(3)788 785 
Purchases11,600 — 11,600 
Sales(11,813)— (11,813)
Settlements— (1,077)(1,077)
Transfers into Level 31,339 214 1,553 
Transfers out of Level 3(1,208)(180)(1,388)
Closing Balance, September 30, 2024$2,628 $476 $3,104 
* Includes increase in unrealized gains of $1.3 billion relating to Level 3 assets still held at September 30, 2024.

The following table presents a roll forward of liabilities measured at fair value on a recurring basis using significant unobservable inputs (Level 3) during the nine months ended September 30, 2024 (in millions).

Level 3 Fair Value Liability Measurements at
 September 30, 2024
 Inventory-
 related
 Payables		Commodity
Derivative
Contracts
Losses
 
Total 
Liabilities
Opening Balance, December 31, 2023$101 $457 $558 
Total increase (decrease) in net realized/unrealized losses included in cost of products sold*(9)875 866 
Purchases10 — 10 
Sales(75)— (75)
Settlements— (823)(823)
Transfers into Level 3— 50 50 
Transfers out of Level 3— (85)(85)
Closing Balance, September 30, 2024$27 $474 $501 
* Includes increase in unrealized losses of $892 million relating to Level 3 liabilities still held at September 30, 2024.
The following table presents a roll forward of assets measured at fair value on a recurring basis using significant unobservable inputs (Level 3) during the nine months ended September 30, 2023 (in millions).

 Level 3 Fair Value Asset Measurements at
September 30, 2023
 Inventories
 Carried at
 Market		Commodity
Derivative
Contracts
Gains
 
Total 
Assets
Opening balance, December 31, 2022$2,760 $541 $3,301 
Total increase (decrease) in net realized/unrealized gains included in cost of products sold*499 1,282 1,781 
Purchases25,190 — 25,190 
Sales(25,439)— (25,439)
Settlements(4)(1,195)(1,199)
Transfers into Level 31,488 339 1,827 
Transfers out of Level 3(1,622)(77)(1,699)
Closing balance, September 30, 2023$2,872 $890 $3,762 
* Includes increase in unrealized gains of $1.8 billion relating to Level 3 assets still held at September 30, 2023.

The following table presents a roll forward of liabilities measured at fair value on a recurring basis using significant unobservable inputs (Level 3) during the nine months ended September 30, 2023 (in millions).

Level 3 Fair Value Liability Measurements at
 September 30, 2023
 Inventory-
 related
 Payables		Commodity
Derivative
Contracts
Losses		Debt Conversion Option
 
Total 
Liabilities
Opening balance, December 31, 2022$89 $603 $6 $698 
Total increase (decrease) in net realized/unrealized losses included in cost of products sold and interest expense*(1)1,068 (6)1,061 
Purchases36 — — 36 
Settlements(34)(1,236)— (1,270)
Transfers into Level 31 135 — 136 
Transfers out of Level 3(4)(21)— (25)
Closing balance, September 30, 2023$87 $549 $— $636 
* Includes increase in unrealized losses of $1.1 billion relating to Level 3 liabilities still held at September 30, 2023.

Transfers into Level 3 of assets and liabilities previously classified in Level 2 were due to the relative value of unobservable inputs to the total fair value measurement of certain products and derivative contracts rising above the 10% threshold. Transfers out of Level 3 were primarily due to the relative value of unobservable inputs to the total fair value measurement of certain products and derivative contracts falling below the 10% threshold and thus permitting reclassification to Level 2.

In some cases, the price components that result in differences between exchange-traded prices and local prices for inventories and commodity purchase and sale contracts are observable based upon available quotations for these pricing components, and in some cases, the differences are unobservable. These price components primarily include transportation costs and other adjustments required due to location, quality, or other contract terms. In the table below, these other adjustments are referred to as basis. The changes in unobservable price components are determined by specific local supply and demand characteristics at each facility and the overall market. Factors such as substitute products, weather, fuel costs, contract terms, and futures prices also impact the movement of these unobservable price components.
The following table sets forth the weighted average percentage of the unobservable price components included in the Company’s Level 3 valuations as of September 30, 2024 and December 31, 2023. The Company’s Level 3 measurements may include basis only, transportation cost only, or both price components.
Weighted Average % of Total Price
September 30, 2024December 31, 2023
Component TypeAssetsLiabilitiesAssetsLiabilities
Inventories and Inventory-Related Payables
Basis36.2 %81.0 %25.0 %33.2 %
Transportation cost31.7 %— %11.5 %— %
Commodity Derivative Contracts
Basis25.6 %32.4 %24.2 %24.9 %
Transportation cost21.6 %— %9.3 %3.2 %

In certain of the Company’s principal markets, the Company relies on price quotes from third parties to value its inventories and physical commodity purchase and sale contracts. These price quotes are generally not further adjusted by the Company in determining the applicable market price. In some cases, availability of third-party quotes is limited to only one or two independent sources. In these situations, absent other corroborating evidence, the Company considers these price quotes as 100% unobservable and, therefore, the fair value of these items is reported in Level 3.