June 30 (Reuters) -ICE cotton rose more than 1% on Friday, aided by a weaker dollar and gains in grains market, while also drawing support from a U.S. Agriculture Department (USDA) report showing lower planted area for the natural fiber.

* The most-active December cotton contract CTz3 rose 1.3 cents, or 1.6%, to 80.33 cents per lb by 13:23 a.m. EDT (1727 GMT). It traded in a range of 78.51 and 80.59 cents a lb.

* Prices were up more than 2% for the week.

* The prices are up as the "acreage report came out little less than what the traders had anticipated", Kansas-based commodity analyst Sid Love said.

* The USDA's annual acreage report showed cotton planted area for 2023 at 11.087 million acres versus trader estimates of 11.119 million acres.

* All cotton planted area is down 19% from last year; American Pima area is estimated at 109,000 acres, down 40% from 2022, the USDA report said.

* The dollar index .DXY lost 0.5%, making the natural fiber affordable to overseas buyers. USD/

* In other markets, Chicago soybeans and corn bounced back, over dry weather in the U.S. Midwest, while U.S. stocks rallied. GRA/

* The USDA weekly report on Thursday showed net sales of 125,600 running bales (RB), noticeably up from the previous week, but down 44% from the prior four-week average. EXP/COT

Reporting by Ananya Bajpai in Bengaluru; Editing by Shilpi Majumdar