May 10 (Reuters) -ICE cotton futures fell on Wednesday as investors squared positions in the run-up to the monthly supply and demand report from the U.S. Department of Agriculture (USDA), due later this week.
* The most active first-month July cotton contract CTc2 fell 0.33 cents, or 0.4%, to 80.66 cents per lb by 1023 EDT (1423 GMT).
* "The positions squaring before the reports tomorrow and Friday seems to be the major factor," driving prices, said Jack Scoville, vice president at Chicago-based Price Futures Group, adding prices are likely to trade sideways in the 78 centsto 88 cents range for now.
* The USDA report is scheduled for release on May 12. Focus was also on the USDA's weekly export sales report due on Thursday.
* Last week, the USDA report showed net sales of 231,300 running bales (RB) of cotton for 2022/2023, up 19% from the previous week. EXP/COT
* Adding to the negative tone, oil prices fell on an unexpected rise in U.S. oil inventories, making polyester, a cotton substitute, less expensive. O/R
* Elsewhere, Chicago soybean futures dropped as the fast pace of planting across the U.S. Midwest and slowing imports by top buyer China kept a lid on the market. GRA/
Reporting by Rahul Paswan in Bengaluru; editing by Eileen Soreng