June 27 (Reuters) -ICE cotton futures fell on Tuesday on a report that top buyer China could release stocks of the natural fiber from its state reserves, with downbeat sentiment across grains and oil markets adding further pressure.

* The most-active December cotton contract CTz3 fell 0.79 cent, or 1%, to 77.1 cents per lb, by 11:52 a.m. EDT (1552 GMT). It traded in a range of 77.05 and 78.64 cents a lb.

* China is planning to release cotton from state stockpiles to boost supplies, Bloomberg News reported.

* Such a move could pressure the market, said Keith Brown, principal at cotton broker Keith Brown and Co, in Georgia, adding that a little improvement in U.S. cotton crop conditions was an additional headwind.

* The U.S. Department of Agriculture (USDA) in a weekly crop progress report on Monday showed 95% of U.S. cotton was planted in the week ended June 25 compared with 89% a week ago.

* The report also highlighted that 49% of cotton was in good-excellent condition versus 47% a week ago.

* Cotton took a hitfrom a decline in oil prices, which makes itssubstitute material polyester cheaper, and a retreat in Chicago corn, wheat and soybeans markets on improvedrain prospects in the U.S. Midwest. GRA/

* But an easing dollar made cotton cheaper for overseas buyers, capping the crop's declines. USD/

Reporting by Ananya Bajpai in Bengaluru; Editing by Shilpi Majumdar and Aurora Ellis