* Traders take profit after institutional month-end buying
* Corporate supply sends 30-year yields higher
* Solid 7-year note auction pushes short-dated yields lower (Adds comments, updates prices)
By Sam Forgione
NEW YORK, May 28 (Reuters) - Long-dated U.S. Treasury yields edged higher on profit-taking and new corporate supply, while short-dated yields fell after solid demand at a seven-year note auction indicated little concern about the eventual pace of Federal Reserve rate hikes.
U.S. 30-year Treasury yields rose slightly to a session high of 2.9 percent. Earlier, they hit a session low of 2.86 percent, which marked the lowest level in nearly three weeks. The yields had fallen in the past two sessions, partly on institutional investors buying the bonds for portfolio readjustments ahead of the month's end.
Analysts said traders who had bought the bonds in anticipation of the institutional purchases took profits on that trade, which performed well with yields falling about 12 basis points over Tuesday and Wednesday. Yields move inversely to prices.
Time Warner Inc. announced a proposed debt offering of senior notes due 2025 and senior debentures due 2045. The announcement also weighed on 30-year debt prices, analysts said.
"Long-end M&A-related corporate supply is crowding out some demand for Treasuries," said Guy LeBas, chief fixed income strategist at Janney Montgomery Scott in Philadelphia.
Strong demand at the Treasury's auction of $29 billion in seven-year notes indicated that investors are expecting a more gradual pace of rate hikes from the Fed, analysts said, partly given economic weakness outside the United States. Short-dated notes are sensitive to expectations of when the Fed will hike rates.
Yields on Treasury notes maturing between two and seven years hit session lows after the seven-year note auction.
"It may be some markets saying: 'even if they start now, they'll have to go very slow because there are so many issues in the rest of the world," said Priya Misra, head of U.S. rates strategy at Bank of America Merrill Lynch in New York, on the likely pace of the Fed's rate hikes.
Data showing the number of Americans filing new claims for unemployment benefits unexpectedly rose 7,000 last week to a seasonally adjusted 282,000 also helped push short-dated Treasury yields lower earlier in the session.
U.S. 30-year Treasury prices were last down 9/32 in price to yield 2.89 percent, from 2.88 percent late on Wednesday .
U.S. five-year notes were last up 4/32 in price to yield 1.51 percent, from a yield of 1.54 percent late Wednesday. Benchmark 10-year notes were mostly flat in price to yield 2.14 percent, little changed from late Wednesday's yield. (Editing by Bernadette Baum and David Gregorio)