The bid to cover was 2.09, the weakest since August 2011, versus the 10-auction average of 2.36.
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As the auction hit the market at 1 p.m. EDT Thursday, the 30-year yield popped nearly 0.6 from 3.38 percent to just shy of 3.44 percent. It was yielding 3.433 percent in late afternoon trading.
"The long bond had rallied over the last several weeks and reached low yield levels we hadn't seen in several quarters," said Ian Lyngen, senior Treasury strategist at CRT Capital. "The fact this was a refunding, $16 billion, and we were close to the day's low yield, the market suggested a concession was warranted if not ahead of the auction, at the auction itself."
Direct bidders—those who can buy directly from the Fed, including foreign central banks—only jumped on 8.4 percent of the auction, the weakest showing showing since March 2013 and below the 10-auction average of 17 percent. The dealer community was awarded 51.2 percent, well above the 44 percent average in the last four 30-year auctions.
"The lack of the direct bidder class is telling me that the long bond is at a lofty level, and it may need to consolidate around this range," said Lyngen.
The bond market rallied early Thursday after European Central Bank President Mario Draghi suggested the ECB could cut rates in June.
"So despite the feel good rally in bonds on Thursday, with a hat-tip to Mario Draghi, coupled with two days of dovish testimony from Janet Yellen, enough is enough as it relates to the 30Y," wrote Adrian Miller, director of fixed income strategy at GMP Securities.
Miller said he expects the long bond has seen its low yield of the year—3.37 percent on May 2.
"Outside of an extraneous shock," he said, "I'd be surprised to see a 30-year yield appreciably lower than we saw it."
Traders have blamed the unwinding of a large short position in the bond market for some of the drive lower in yields. Miller said that is likely close to being unwound in the 30-year.
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—By CNBC's Patti Domm