April 8 (Reuters) -ICE cotton futures inched up on Monday, after briefly touching their lowest in more than two months, supported by a weaker U.S. dollar, while focus shifted to monthly supply and demand report from the U.S. Department of Agriculture (USDA) later this week.

* Cotton contract for May CTc1 rose 0.32 cent, or 0.4%, to 86.75 cents per lb by 11:43 p.m. ET (1543 GMT).

* The contract hit a session low at 86.12 cents - the lowest since Feb. 2.

* The dollar slipped as investors focused on U.S. inflation data later this week, making cotton less expensive for overseas buyers. USD/

* Investors now await the release of the World Agriculture Supply and Demand Estimates (WASDE) report, due on April 11.

* Speculators raised net long position by 626 contracts to 58,999 contracts in ICE U.S. cotton futures in the week of April 2. CFTC/

* "Overnight we had a sharp rally ... but since that time it's given all that up," said Keith Brown, principal at cotton broker Keith Brown and Co, in Georgia.

* "Too many farmers held cotton, and now that we've gone under $0.90, they're getting panicky and selling any and all rallies," Brown added.

* "For us to see a rally in new cotton crop (December contract), the market needs to see some type of adverse weather event."

* Meanwhile, Chicago corn fell on expectations of good U.S. planting weather and concerns about possible U.S. plans which could reduce the attraction of corn for biofuel production. GRA/

Reporting by Rahul Paswan in Bengaluru; Editing by Shilpi Majumdar