Domestic buyers key to gains at Keeneland sale

LEXINGTON, Ky. – Keeneland’s January horses of all ages sale started and ended with a bang as all four sessions rang up hefty gains, buybacks fell, and the number of horses selling for $200,000 or more more than doubled, from 16 last year to 37 in 2012.

The results had many consignors and sale executives breathing a sigh of relief – and facing the 2012 yearling auction season with more hope than they had in 2011. Breeders still have some worries – chiefly whether stud fees will remain at current levels or go up on the strength of recent auctions – but they note positive signs, including strong participation by domestic buyers over the last 14 months.

Led by Katsumi Yoshida’s $1.4 million purchase of Topliner, Star Billing’s dam who was pregnant to Medaglia d’Oro, the four-day auction grossed $37,991,900 for 1,003 horses, a 50 percent rise over total revenue at last year’s five-day sale, when 1,021 horses sold. The 2012 cumulative average price gained 53 percent, from $24,731 last year to $37,878, and median performed even better, doubling its $7,500 figure in 2011 to $15,000 this season.

In more welcome news, buybacks fell from last year’s 27 percent level to 20 percent. There were 344 withdrawals from the 2012 auction, compared to 421 from last year’s larger catalog.

“We came out of the breeding stock sales and the yearling sales in 2011 with the resurgence of the domestic buyer, and that is very, very good for our industry,” Keeneland sales director Geoffrey Russell said. “In September, all the million-dollar horses were bought by domestic buyers. Domestic buyers were very strong in November, and they’ve continued on here in January. They make the market more healthy.”

Pinhookers, speculators who buy yearlings for resale either later in the season or as juveniles, also provided a lift, particularly in Book 2 of the catalog, covering the auction’s last two days. At the Wednesday session, in particular, so-called “short yearlings”– those early in their yearling year, having just turned one on Jan. 1 – dominated prices at $100,000 or more.

“There’s been huge demand for yearlings,” said Reiley McDonald of the Eaton Sales agency. “Their supply is fairly limited in the last book. There are a lot of people who had pretty good pinhooking years who are reinvesting their money and may have brought some new investors into the game. So you have a lot of people looking for yearlings when there are many to be had, and, of course, the really good short yearlings are always scarce.”

Pinhooker activity didn’t surprise Keeneland’s Russell.

“Going in to the November sales, we’d heard that the weanling-to-yearling pinhookers had raised a lot of money to buy some foals,” Russell said. “November was very strong for foals, a lot of end-users came in and pushed the pinhookers back a bit. I’d heard that they’d been buying foals privately since November, so we hoped they hadn’t spent all their money before January. And pinhookers have been very strong.”

The sale also benefited from good international bidding, most prominently when Yoshida bid $1.4 million for Topliner, the same amount he paid for last year’s sale-topper, Ave.

“We actually expected the Japanese buyers to be stronger in November than they were,” Russell said. “They’re very astute, and when they value their horses they don’t go over what they value them, so I think in November they might have been outbid several times. We hoped they would come back in January, and they did.

“It is a new economy,” he added. “There’s very little credit, so everything is cash. You tend to be more selective and conservative when you’re paying out of your own pocket. As we saw starting even four or five years ago, conformation of mares now is very important. Mares with good female families did bring more money, but, after a certain point, if you haven’t had a runner, the market doesn’t want you, regardless.”

Russell noted that smaller foal crops in recent years have helped bring supply and demand more in line at Thoroughbred auctions, too. Consignors agree, but, as one pointed out, there’s a potential downside to lower supply, too: not having enough product to sell at the summer and fall yearling auctions.

Redoute’s Choice colt sells for $772,500

Australia’s Magic Millions Gold Coast select yearling sale saw another high six-figure session-topper Friday when trainer Gerald Ryan paid about $772,500 for a Redoute’s Choice colt out of Cloister, by Marauding. Ryan had good reason to want the colt. He trains his Group 1-winning full sister, Melito, for the Reavill Racing Syndicate. Reavill Farm, which bred Melito, also bred and sold Friday’s session-topper.

Through Friday, the select sessions had sold 407 yearlings, down from 420 last year, for a combined gross of about $53,526,525. That slipped slightly, by just more than 1 percent, from last year’s aggregate. The average price, about $131,514, inched up by 2 percent. But median was more bullish with an 11 percent increase to about $103,000. Buybacks also improved from 20 percent in 2011 to 16 percent in 2012.

The final select session was to take place Saturday.