Sept 27 (Reuters) -ICE cotton futures ticked up on Wednesday, tracking gains in the grains and oil markets, while traders awaited a federal weekly export sales report.

* Cotton contract for December CTZ3 rose 0.44 cent, or 0.5%, to 88.62 cents per lb at 12:19 p.m. EDT (1619 GMT), after touching a near four-week high earlier in the session. It traded in a range of 87.76 and 89.45 cents a lb.

* Cotton prices are up as it is following the energy market, said Rogers Varner, president of Varner Brokerage, in Cleveland.

* Cotton drew support from a surge in oil prices after U.S. crude stocks fell more than expected. Higher oil prices make polyester, a cotton substitute, more expensive. O/R

* Chicago corn and soybean futures also edged higher as investors covered positions following recent lows. GRA/

* But limiting the gains, the dollar index .DXY rose to its highest since November 2022, making the natural fiber less appealing to overseas buyers.

* Investor focus is now on the U.S. Department of Agriculture's (USDA) weekly export sales report due on Thursday.

* In the export sales report, "I expect 75,000 bales sold... the cotton current balance sheet is very tight for the U.S, the next two WASDE reports should clarify what the U.S. has in stock", Varner added.

* The next World Agricultural Supply and Demand Estimates (WASDE) report is due on Oct. 12.

* The USDA in a weekly crop progress report on Monday said 30% of the cotton crop was in good to excellent condition compared with 29% last week.

Reporting by Daksh Grover in Bengaluru; Editing by Shilpi Majumdar