May 23 (Reuters) -ICE cotton futures extended losses on Tuesday, pressured by a stronger dollar and improved weather conditions for the natural fiber crop in key growing region of West Texas.

* The most active first-month July cotton contract CTc1 fell 0.46 cent, or 0.5% to 84.86 cents per lb, at 10:28 a.m. ET (1427 GMT), trading within a range of 83.86 and 85.66 cents a lb.

* The rising U.S. dollar is among the factors breaking cotton's rise, although the fiber was still consolidating overall following recent sharp upticks, said Rogers Varner, president of Varner Brokerage, in Cleveland.

* A higher dollar makes greenback-priced cotton less attractive, especially for overseas buyers holding other currencies. USD/

* Putting a floor under cotton prices, however, oil prices rose on optimism the U.S. would avoid a debt default and a tighter market outlook. Higher oil prices make production of substitute polyester more expensive. O/R

* Traders also took stock of federal weekly planting progress data, which showed 45% of cotton crop was planted for the week of May 21, close to the five-year average of 50%.

* In the wider grains market, Chicago soybean futures edged lower while corn rose as participants assessed brisk U.S. planting along with a dry weather outlook for the Midwest. GRA/

* Additionally, the weather in West Texas had improved, with rains forecast for the region on Wednesday and Thursday being an important event, Varner added.

Reporting by Seher Dareen in Bengaluru; Editing by Rashmi Aich