Oct 23 (Reuters) -ICE cotton futures rebounded 3% on Monday as investors took advantage of a sharp retreat in prices in the previous session, with a weaker dollar lending further support.

* Cotton contracts for December CTZ3 rose 1.8 cent, or 2.18%, at 84.2 cents per lb at 12: 23 p.m. ET (1623 GMT).

* On Friday, prices fell to a three-month low at 81.51 cents per lb, pressured mostly by a wider market retreat, amid the prospects of weak demand from key buyer China.

* "Cotton has found some good demand around 82 cents," finding sound technical support at that level, said Rogers Varner, president of Varner Brokerage in Cleveland.

* "Overall cotton demand has not been great, but neither has it been too terrible as the world has lost several million bales of cotton, so I think a price in low 80 cents is too cheap for the current supply of cotton," Varner added.

* The dollar .DXY edged lower against a basket of currencies, making cotton less expensive for other currency holders. USD/

* Speculators cut net long position by 14,718 contracts to 19,297 in week to Oct. 17, data from the Commodity Futures Trading Commission (CFTC) showed on Friday. CFTC/

* In the grain market, Chicago soybeans, corn and wheat edged lower as an advancing Midwest harvest and rain relief expected in other grain belts worldwide helped maintain pressure on prices. GRA/

Reporting by Daksh Grover in Bengaluru; Editing by Anil D'Silva