Oct 26 (Reuters) -U.S. cotton futures extended gains on Thursday, defying a stronger dollar to touch a 10-day high after a weekly U.S. Department of Agriculture (USDA) report showed an increase in exports sales of the natural fiber.

* Cotton contracts for December CTc1 rose 1.01 cent, or 1.2%, at 84.82 cents per lb at 16:37 GMT, after hitting its highest since Oct. 16 earlier in the session.

* The USDA's weekly export sales report showed net sales of 186,100 running bales for the marketing year 2023/2024. EXP/COT

* The net sales were up noticeably from the previous week and 82% higher than the prior four-week average. The increases were primarily led by China and Bangladesh.

* "The export sales report was very positive, even though shipments at a marketing year low is actually disappointing," said Jim Nunn, owner of Tennessee-based cotton brokerage Nunn Cotton.

* The USDA report also showed that exports in the week ending Oct. 19 hit a marketing-year low of 98,000 running bales.

* The U.S. dollar rose 0.3%, making cotton more expensive for overseas buyers. USD/

* "Here we're trying to see where the momentum will take us, but the stronger dollar is not helping us," Nunn added.

* Elsewhere, Chicago wheat futures turned higher, recovering from an earlier two-week low, as a report that Ukraine has halted traffic in a Black Sea shipping channel put attention back on war risks to export supply. GRA/

Reporting by Deep Vakil in Bengaluru; Editing by Shailesh Kuber