The Treasury will sell $24 billion in 10-year notes on Wednesday and $16 billion in 30-year bonds on Thursday. A $32 billion three-year auction on Tuesday drew average demand.

Treasury futures were last 4/32 down on the day at 121-31/32, off a five-month high at 122-17/32 hit on Monday and below a 200-day moving average at 122-14/32, pointing to further weakness.

"It seems that a supply concession is being built in ahead of today's ten-year auction and the market needs to go down a little bit more before we guarantee a successful auction," one trader said.

Ten-year yields were at 3.2062 percent and were seen having room to rise at least towards 3.25 percent in the short-term.

"If we can get as cheap as 3.25 percent on 10s, that would be a good place to rally from," the trader said. * Falls in German Bunds, on the back of a slight improvement in risk appetite on reports that Greece could receive another bailout package, were also acting as a drag for Treasuries on Wednesday, traders said.

However, the Greek situation remains volatile, with investors still pricing in a high probability that the country will eventually need to restructure its debt.

Some support may also come from bond purchases by the Federal Reserve, with the New York Fed set to buy Treasuries for a third straight day. It plans to buy $6-8 billion of bonds maturing between November 2016 and May 2018, after it scooped up $13.9 billion in the previous two days.