TREASURIES-Prices ease before Yellen testimony, 10-year note sale
* Traders cautious ahead of Yellen talk
* Top U.S. central banker seen staying dovish
* 'When-issued' 10-year quoted at 2.639 percent
NEW YORK, May 7 (Reuters) - U.S. Treasury prices eased on Wednesday, lifting yields as the government readied a sale of $24 billion of new debt and traders braced for possibly market-rattling congressional testimony by Federal Reserve Chair Janet Yellen.
Even as tensions in Ukraine encouraged buying of Treasuries and other safe-haven assets, 10-year Treasury notes declined 4/32 in price and were yielding 2.616 percent in early New York trading.
U.S. 30-year bond yields, which on Friday were at their weakest level since June 19, 2013 of 3.34 percent, on Wednesday stood at 3.400 percent after a decline in price for the day of 6/32.
Shorter maturities were mostly off in price as well.
"Traders are being a little cautious in Treasuries and want to make sure Yellen doesn't drop any more surprises," said Sharon Stark, chief fixed income strategist at D.A. Davidson in St Petersburg, Florida.
America's top central bank is widely forecast to keep a dovish stance against monetary tightening but Stark said Treasuries traders will be closely listening to Yellen for shifts on winding down the Fed's massive bond-buying program.
Traders will also watch for clues on when the Fed will start raising interest rates, Stark said, adding D.A. Davidson expects U.S. rates to start increasing during 2015's second quarter.
Wednesday's $24 billion benchmark U.S. 10-year note supply is on track to sell at its lowest yield since August following the recent yield drop on some doubts about the economy and safe-haven bids on continued conflicts in eastern Ukraine.
In "when-issued" trading, the upcoming 10-year supply, which is the second leg of this week's May Treasury refunding, was last quoted at a yield of 2.639 percent.
The 10-year auction held last August cleared at a yield of 2.620 percent.
"Our Treasury traders are seeing good flows into the auctions, especially at the long end. Pension funds seem to be trying to fill some gaps," Stark said.
On Tuesday, prices of Treasuries were little affected by an auction of $29 billion of 3-year bills, which was the first of three large deals set for this week. The deal's high yield was 0.928 percent.
A $16 billion auction of 30-year bonds is due on Thursday. (Additional reporting By Richard Leong in New York; Editing by Nick Zieminski)
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