ICE cotton futures fell nearly 1.3 percent on Monday to mark its lowest level since August 25, hurt by selling by funds and suitable weather conditions for harvesting of the natural fibre crop. Cotton contracts for December settled down 0.88 cent, or 1.29 percent, at 67.57 cents per lb. It touched a low of 67.55 per lb.

"The funds have been decreasing their net long positions that were established specifically because of the hurricanes, so that has been (applying) downward pressure. They'll likely be selling down to what they had before the hurricanes," said Gabriel Crivorot, analyst at Societe Generale in New York. Speculators cut their net long position in cotton contracts for the second straight week, the US Commodity Futures Trading Commission data showed on Friday.

Dealers cut their net long position by 5,007 contracts to 57,779 contracts in the week to September 26. The December contract has shed nearly 11 percent since hitting a contract high of 75.75 cents on September 8 amid concerns of crop damage from Hurricanes Harvey and Irma. The US Department of Agriculture's weekly crop progress report is due after the market close on Monday.

"Mostly favourable harvest conditions are expected across much of the belt this week. However, West Texas is expected to receive some additional precipitation," said Louis Rose, co-founder and director of research and analytics at Rose Commodity Group.

Total futures market volume rose by 8,540 to 22,005 lots. Data showed total open interest gained slightly, adding 176 to 232,964 contracts in the previous session. Certificated cotton stocks deliverable as of September 29 totalled 3,860 480-lb bales, up from 3,020 in the previous session. The dollar index was up 0.53 percent while the Thomson Reuters CoreCommodity CRB Index, which tracks 19 commodities, was down 1.19 percent.