Cotton holds ground as focus turns to US supply-demand report

Jan 8 (Reuters) - ICE cotton futures were little changed on Wednesday as investors held back from making big bets ahead of the U.S. Department of Agriculture's (USDA) monthly supply-demand report.

Cotton contracts for March CTc1 rose 0.07 cent, or 0.1%, to 68.58 cents per lb at 11:19 a.m. ET (1619 GMT).

"We were lower early, but then we came back to unchanged, and I think that's just a reflection that we have some pretty important reports being released by USDA on Friday," said Jack Scoville, vice president at Price Futures Group.

Focus will be on USDA's World Agricultural Supply and Demand Estimates (WASDE) report due at 12:00 p.m. ET on Friday.

The U.S. dollar rose for a second straight session on higher U.S. bond yields, following a report that President-elect Donald Trump was contemplating the use of emergency measures to allow for a new tariff program. USD/

A stronger U.S. dollar makes cotton more expensive for overseas buyers.

Cotton demand is going to be low for a while and prices might reach 71-72 cents and the overall low could possibly drop to around 65 cents, Scoville added.

In the grains market, Chicago corn and wheat futures edged down while soybeans inched up as a rising dollar curbed U.S. prices and traders assessed rain chances in dry Argentina crop belts. GRA/

Elsewhere, oil prices extended losses as the dollar strengthened and U.S. Energy Information Administration data showed larger-than-expected draw in crude stocks. O/R

Lower oil prices make cotton-substitute polyester less expensive.

(Reporting by Anmol Choubey and Sherin Elizabeth Varghese in Bengaluru; Editing by Devika Syamnath)

((anmol.choubey@thomsonreuters.com;))