The markets started Friday in a fairly quiet fashion. The US markets were edging down throughout the day but when they opened the sell began in earnest. It became a self fulfilling prophecy as fund managers liquidated long positions in order to avoid the margin calls that were coming. Soybeans fell by $50 with wheat and corn following suit. In the wake of such a huge sell-off UK and French wheat followed suit. The question now is was this enough of correction and can the markets recover from this. On the surface it seems that the sell-off was over done, overnight the US markets have managed a small rally.
Fundamentally the markets still have a bullish edge; crops aren't in a perfect condition, stocks are low and China is still buying but sentiment can be a powerful emotion and this certainly happened on Friday. This should bring in buying interest but sellers will not be interested at these levels so the market now needs a reset.
Its a new week, traders will be assessing the Friday sell off and trying to see if emotion or fundamentals are in control.