(Reuters) - Daily trading limits for all cotton futures contracts except for July will fall to 3 cents per lb, ICE Futures U.S. said on Tuesday, following the market's biggest daily drop in prices in years.

Effective start of trading on Wednesday, the daily trading limit will revert to 3 cents above and below the prior day settlement price from 4 cents, it said.

There are no daily price limit moves in the spot contract during its delivery period ahead of its July 9 expiry. July entered its delivery period on Monday.

July prices sank over 7 percent on Tuesday, the second straight session of hefty losses ahead of the contract's expiry. (Reporting by Josephine Mason; Editing by Chris Reese)