Jan 16 (Reuters) -ICE cotton futures trickled lower on Tuesday, still reeling from the U.S. Department of Agriculture's (USDA) supply-demand report on Friday that projected higher global ending stocks, with a stronger dollar also weighing on prices for the natural fiber.

* Cotton contracts for March CTc1 fell 0.27 cent, or 0.3%, to 81.04 cents per lb by 12:35 p.m. ET (1735 GMT) after slipping as much as 0.8% to 80.68 cents a lb earlier in the session.

* This year's first USDA World Agricultural Supply and Demand Estimates (WASDE) report lowered its outlook for world consumption in 2023/24 by 1.3 million bales and raised the global ending stocks forecast by 2 million bales.

* "Just at face value, the total global stocks going up 2 million may give the impression that it's bearish price-wise," said Peter Egli, director of risk management at British merchant Plexus Cotton.

* Prices were also pressured by the U.S. dollar, which rose 1% to a one-month high, making U.S. cotton more expensive for overseas buyers. USD/

* However, "the U.S. numbers are pretty tight and I don't think you're going to see massive selling going forward and every time we dip below 80 cents, China is buying more," Egli added.

* The report trimmed 2023/24 projections for U.S. production by 342,000 bales to 12.43 million bales and expected U.S. ending stocks to be 200,000 bales lower at 2.9 million bales.

* Speculators trimmed their short position in ICE cotton futures by 987 contracts to 6,517 in the week to Jan. 9, the Commodity Futures Trading Commission (CFTC) said on Friday. CFTC/

* In the grains market, Chicago soybean futures ticked up, rising from multi-year lows in the previous trading session, as traders wrestled with widely varying forecasts for South America's crop. GRA/

Reporting by Deep Vakil in Bengaluru; Editing by Shweta Agarwal