Oct 2 (Reuters) -ICE cotton futures edged higher on Wednesday, helped by buyback phenomenon as traders covered short positions ahead of a weekly federal export sales report on Thursday.

* Cotton contracts for December CTZ4 rose 0.23 cent, or 0.3%, to 73.32 cents per lb at 12:21 p.m. EDT (1621 GMT).

* "Mostly speculative buybacks or buying back short futures are keeping Dec. 24 cotton contract buoyed this morning, but there is no momentum," said Valentin Olah, risk management consultant at StoneX Group.

* Buybacks refer to traders or investors buying back futures contracts they had previously sold.

* "Cotton has lost market share in fibers, whilst demand is expected to gradually increase at a very slow pace," Olah said, adding that prices are anchored in the low 70s for the near term.

* U.S. East Coast and Gulf Coast dockworkers began their first large-scale strike in nearly 50 years on Tuesday, halting the flow of about half the country's ocean shipping, after negotiations for a new labor contract broke down over wages.

* "The domestic U.S. cotton is facing pressure as evidenced via the Dec24/Mar25 price differential, which has dropped significantly to its all-time lows," Olah said.

* In other agricultural markets, Chicago wheat rose to set a new 3-1/2-month high as concern grew about drought in Russia while a drone attack on a Ukrainian river port kept attention on war risks, while corn prices also extended gains to a fresh three-month peak. GRA/

* Oil prices climbed more than 3% as Israel and the U.S. vowed retribution over Iran's biggest ever direct attack on its regional adversary, firing more than 180 ballistic missiles. O/R

* Higher crude prices make polyester, an alternative to cotton, more expensive.

* Traders now await the U.S. Department of Agriculture's (USDA) weekly export sales report on Thursday for further clues on the demand outlook.

Reporting by Sherin Elizabeth Varghese in Bengaluru; Editing by Shreya Biswas