Written by Deep Vakil for Reuters 

Dec 28 (Reuters) - ICE cotton futures eased in range-bound trade on Wednesday, as traders await the U.S. Department of Agriculture's (USDA) weekly export sales report due later this week for cues on demand from biggest consumer China, as it grapples with a surge in COVID infections.

* The cotton contract for March CTH3 fell 1.09 cent, or 1.3%, to 83.15 cents per lb at 11:35 ET (16:35 GMT). It traded in a range of 83.07 and 85.08 cents a lb.

* "Everyone will be watching if we see more of the same in the export sales report this week or if we see some relief from cancellation," said Jordan Lea, senior trader at DECA Global, adding that the market will be stuck probably in a sideways range as it looks to break out either higher or lower.

* Last week, the USDA's export sales report showed net sales reductions of 87,800 running bales for 2022/2023, mostly due to lower exports to China. EXP/COT

* Chinese hospitals and funeral homes were under intense pressure on Wednesday as a surging COVID-19 wave drained resources as the nation began dismantling the world's strictest COVID regime of lockdowns and extensive testing.

* The easing of COVID-19 restrictions in China will be bearish in the short term until the wave of new infections passes, but it will be bullish in four to six weeks by the time the Chinese New Year is over, Lea said.

* The dollar index .DXY, which measures the greenback against six major currencies, rose 0.2%, making U.S. cotton more expensive for overseas buyers. USD/

* Oil prices dipped, making polyester, a cotton substitute, less expensive. O/R

* Chicago soybean futures rose for a third consecutive session, while wheat and corn edged lower. GRA/

(Reporting by Deep Vakil in Bengaluru; Editing by Shailesh Kuber)

((DeepKaushik.Vakil@thomsonreuters.com))