Sept 5 (Reuters) -ICE cotton futures dipped more than 3% on Tuesday on a strong dollar and as investors booked profits after the natural fiber hit a 13-month high in the previous session.

* Cotton contracts for December CTZ3 fell 1.42 cents, or 1.7%, to 88.46 cents per lb by 12:04 p.m EDT (16:04 GMT), after touching their lowest since Aug. 30 at 87.17 cents.

* The dollar rose as jitters over global growth, particularly in China, caused investors to flock to the safe-haven U.S. currency. A stronger dollar makes cotton more expensive for overseas buyers. USD/

* The December contract on Friday hit its highest in more than a year on lower crop production estimates from China, which is the biggest consumer of U.S. cotton. COT/N

* "It's just more selling pressure coming in, probably profit taking after Friday's rally and potentially some grower fixations as well," said Bailey Thomen, cotton risk management consultant with StoneX Group.

* There's some potential for improvement as the weather forecasts show some rains for the next week in the West Texas region which could also be keeping the market from advancing any further for the moment, added Thomen.

* Also pressuring cotton, equities fell as higher treasury yields weighed on some major growth stocks, while weak service sector data from China and Europe rekindled worries about the global economy.

* Elsewhere in the grains market, corn was almost unchanged, while soybeans ticked lower and Chicago wheat futures steadied after a new three-month low. GRA/

* On the other side, more-than-usual rain in China's Xinjiang region this month may impact the quality and quantity of cotton in the country.

Reporting by Rahul Paswan in Bengaluru; Editing by Shinjini Ganguli