There usually is a lot of fretting about the fate of horses consigned to the Keeneland September yearling sale after the first week. In a market of thousands, people worry about the strength of the demand, particularly for horses whose pedigrees and conformation don't come close to measuring up to the best.
Interestingly, in recent yearling auctions where nearly all the horses sold below $100,000 apiece, there were signs of stabilization and there even were significant rebounds. The Fasig-Tipton New York-bred preferred, Ocala Breeders' Sales Co. August, and Fasig-Tipton Texas sales all posted encouraging results. This didn't mean people made money, but horses at least were finding new homes and prices had stopped plunging.
The pre-September sale results for the top of the yearling market were not positive, with both the Deauville sale in France and the Fasig-Tipton Saratoga select sale experiencing downturns. But these auctions might not have been good indicators of the strength of the market for the very best horses available.
The 2009 Saratoga sale experienced big gains at a time the Thoroughbred auction business, in general, was tumbling, and that was because Sheikh Mohammed apparently wanted to make a big statement about that sale's importance. The company that owns Fasig-Tipton is owned by a company that is headed by one of the Dubai ruler's associates, and Sheikh Mohammed spent a lot through his bloodstock manager, John Ferguson, while spreading money around among bloodstock agents and trainers. Sheikh Mohammed remained an important buyer this year, but cut back on his spending.
In addition, at least one major buyer who had been concerned about Sheikh Mohammed's financial strength in 2009, made an effort to avoid bidding battles with him and other buyers probably also did the same, which hurt prices
The Deauville sale was held during Ramadan, which could have affected the participation of shoppers from the Middle East.
Even so, there was evidence that some other buyers at the top of the market were being more cautious in their spending. A number of shoppers looking at select yearlings seemed more comfortable in the $300,000 to $400,000 range and were reluctant to venture above $500,000.
It will be interesting to see how the top of the market performs during the first two sessions at Keeneland. Officials made changes in the format for that portion of the September auction this year that moved the selling to night and dramatically reduced the number of horses offered, and the market could be affected by those moves. Determining their impact will be an important part of any final analysis about the prevailing trend.