First, I hope all are safe and healthy during this unprecedented and scary time. Hopefully there is some positive light at the end of the tunnel coming.
As for the market, I believe KC is approaching levels where upside positioning should be carefully considered. In terms of spreads, very interesting activity. Just in terms of relative spread value, the current pricing (whether it be NU -1.80 or -1.95) is quite strong. Just to show a short term historical context, we typically see NU trading in the general -2.30 area this time of year. As for UZ,anywhere from -3.60 to -3.40. So what we are seeing here is impressive. Tango, I would say the falling warehouse stocks and supply chain disruptions are the key drivers. Again, we are living in unprecedented times and the way in which business( particularly supply side) is conducted is in uncharted waters, at least in our lifetime. How long this continues and how future business is conducted become very critical questions.
I see Honduras still accounts for a large % of the total stocks. Looking at yesterdays update, I see this is where the reductions are coming from as well.
Any other input much appreciated. Good trading to all.
Stay safe, stay healthy.