Inventories consisted primarily of bulk ethanol, corn, co-products, Low-Carbon Fuel Standard (“LCFS”) credits and unleaded fuel, and are valued at the lower of cost and net realizable value, with cost determined on a first-in, first-out basis. Total inventories are net of a valuation adjustment of $256,000 as of June 30, 2017. Inventory balances consisted of the following (in thousands):

Inventory balances consisted of the following (in thousands):