Keeneland September Outlook: Market Could Be Solid

The Keeneland September yearling sale is the largest
auction of its kind in the world. Because it offers so many horses of so many body
and pedigree types, it is this country's best gauge of the health of the
yearling market.

Last year, the auction switched to a new format for
its select sessions, which seemed to help boost business in the portion of the
sale devoted to the fanciest stock. A key to continued success is the
performance of the auction's selection team and its ability to choose yearlings
with the right body types that appeal to buyers. If the team has done its job
right, shoppers should respond with enthusiasm.

Sheikh Mohammed pumped up the results of the recent Fasig-Tipton
Saratoga select yearling sale, purchasing mostly the very best horses sired by
the stallions that stand at his Darley operation. But at Keeneland, it will be
no surprise if Sheikh Hamdan is much more active than his brother. He was the
select sessions' biggest spender in 2010 and the name of his Shadwell operation
didn't appear as a buyer in the sale summaries of the Saratoga auction. That
means he's probably targeting the Keeneland auction.

The brothers from Dubai should face solid
competition for the small group select yearlings (only 211 are cataloged) from
domestic shoppers. While Sheikh Mohammed dominated the proceedings at the
Saratoga sale, there were eager underbidders for the horses he bought and their
agents indicated they would be showing up at Keeneland to compete again.

Even so, horses selling for seven-figure prices
still probably will be rare. The values for top stallion prospects have fallen
dramatically, giving buyers less of a reason to spend a lot of money for a
yearling colt in an effort to win a big lottery payoff.

The good news for Keeneland is that the wild swings
in the stock market in August and debt problems overseas didn't seem to
negatively affect the results of the earlier yearling auctions. Favorable tax
incentives this year and the prospect of a video lottery casino opening at
Aqueduct in New York might be the reasons why buyers haven't been daunted by
this country and the world's latest financial setbacks.

Following the select sessions, the rest of the first
week of the sale should attract the widest variety of buyers. On offer will be
horses with enough pedigree and conformation to lure the elite shoppers while
still being affordable for pinhookers, racing partnership stables, and people
whose budgets won't accommodate a $1 million or $500,000 purchase.

The second week of the September sale, when the
lesser quality yearlings will be offered, has benefited tremendously from
Keeneland's efforts to target emerging foreign markets. As a result, consignors
are worrying less about finding homes for those types of horses, which have
been popular with buyers from South Korea, South America, Mexico, and the
countries formed following the breakup of the USSR.

There also will be fewer of the horses of lesser
quality on offer. Much of the recent decline in the size of America's foal
crops has resulted from people culling their lesser mares, which were unable to
produce commercially viable offspring. In addition, some people who are still
breeding lesser quality horses realize they lack auction appeal, so they aren't
even bothering to enter them in a sale.

The Keeneland auction starts Sept. 11 in Lexington and runs through Sept. 22, with a day off from selling Sept. 16.





    









  



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