The Keeneland September yearling sale, which opens Sept. 10 in Lexington, should sort out all the mixed messages that the Thoroughbred marketplace has been sending out this year. As the largest Thoroughbred auction in the world, with 5,553 horses cataloged, the Keeneland sale offers large quantities of yearlings in all price ranges, so people look to its results to determine the health of every yearling market level, from the highest to the lowest.
"I've been watching the sales all year long and I'm getting mixed signals, but I think we'll have a small correction at Keeneland," said Joe Seitz of Brookdale Sales. "We have more horses than we've ever had here before, so I'm slightly pessimistic because of the numbers. The laws of supply and demand have to take over at some point, and I feel like this will be the year. We've got a little more product and our portion of the world economy is not very strong."
Juvenile auctions lost some of their financial punch earlier this year, and then the Fasig-Tipton Kentucky select and Saratoga select yearling sales both suffered moderate setbacks in their average and median prices while the Sarataga auction's gross revenue declined slightly.
However, some of the regional yearling sales turned in more solid performances. The Fasig-Tipton New York-bred preferred auction generated upswings in its gross and median, and the select portion of the Ocala Breeders Sales Co. August yearling sale posted its highest median ever.
"I'm anticipating a solid market," said Paramount Sales' Pat Costello of the Keeneland September auction. "All the sales in this country have been fairly solid, and many of the European sales have been up a little bit. Everything is going to be fine."
The Keeneland sale kicks off with two sessions of select horses, the very best in terms of conformation and pedigree. And that part of the yearling market, so far this year, seems to have struggled the most to keep pace with last year's record-setting figures. The number of horses that brought seven-figure prices at the Saratoga select auction fell from five last year to two this year.
Whether buyers at the top are showing more restraint or whether they have yet to see the type of horses they really want is not yet clear. There have been no bidding battles in 2007 between the two biggest buying forces, Sheikh Mohammed and Coolmore Stud, but Seitz thinks that could change.
"I'm not meaning to be smug, but we really haven't had the chance to test the top of the market yet," he said. "Book one at the September sale has become so strong over the last few years that there's nothing to really compare yet. I think there will be plenty of high-end success at this sale."
Kerry Cauthen of Four Star Sales believes top-end buyers have been waiting for September to unleash their shopping power.
"I'm actually pretty encouraged about this sale," he said. "There's been a real flurry of pre-sale interest in yearlings at the farm and some private sales that I'm aware of that indicate there's a lot of enthusiasm. I just think that a lot of people have been waiting a bit, sitting back, and seeing what everybody else thinks a horse is worth. I think they’re ready to participate, and I think they feel like this is the sale to do it at."
But Neil Howard, general manager of Gainesway Farm, doesn't expect the very top of the market to surpass last year's performance, when Keeneland sold its highest-priced September yearling ever, an $11.7-million Kingmambo colt now named Meydan City.
"There is a little bit of overproduction at the upper end and the number of buyers is the same, so it's just a little bit out of whack," he said. "It won't be as strong as in the past."
History shows that what happens in the first two days of the Keeneland September sale provides a very good indication of whether the entire auction will be up or down based on average price.
Since 1990, the year after the select portion was introduced into the sale's format, the average for the select sessions combined and for the entire sale have followed the same trend in all but two years. Both were up in 12 of the years, and both were down in three of the years. The exceptions were 1992 and 2001. In both years, the select sessions' combined average was up, but the entire sale's average was down.
The Keeneland auction will continue through Sept. 25, with the exception of Sept. 14, which will be dark.