* Cotton, U.S. stocks fall ahead of Fed meeting

* Dealers eye China manufacturing sector data due this week

* Steepest weekly drop in ICE stocks since July 2011

NEW YORK, July 29 (Reuters) - ICE cotton futures slipped on Monday on investor selling as worries built ahead of a Federal Reserve meeting eyed for signs of when the U.S. central bank will slow its stimulus and concerns grew over economic growth in China, the world's top textile market.

The most-active December cotton contract on ICE Futures U.S. edged down 0.41 cent, or 0.5 percent, to settle at 84.71 cents per lb.

U.S. stocks dipped and the dollar climbed a day ahead of the Fed's two-day policy meeting this week eyed by traders for signs of an end to an era of easy money that has boosted liquidity and supported commodities markets.

The Thomson Reuters-Jefferies CRB index, a benchmark for global commodities markets, touched a near three-week low.

"If people believe the commodities supercycle is over, there is going to be a lot of passive money that leaves commodities," said a U.S. broker, referring to long investment by large funds.

A strengthening U.S. dollar pressures dollar-traded commodities, making them more expensive to holders of other currency.

Dealers eyed official data on manufacturing activity this week from China, the world's top consumer of many raw materials, after data last week pointed to a slowdown.

Expectations of improved global cotton output in the new crop year that begins on Aug. 1 added weight, dealers said.

Heavy monsoon rains in India, the world's second-largest producer, are expected to help the cotton crop.

The December cotton contract closed below its 50- and 100-day moving averages at 85.24 cents and 85.72 cents, an indication of technical pressure in a market that has been largely range-bound in recent sessions.

Trading volumes totaled fewer than 11,000 contracts, compared with a 30-day average of over 24,000 lots, preliminary Thomson Reuters data showed.

Still, worries over tight nearby U.S. supplies in the first months of the 2013/14 crop buffered fiber from bigger losses and pushed December prices to a steeper premium against the March 2014 contract.

The December/March spread widened to 2.00 cents per lb from 1.72 cents a lb previously.

A steep drop in exchange stocks last week helped drive the backwardation, dealers said.

Certified stocks totaled about 152,000 bales on Friday, down by 295,000 bales from a week earlier, the most recent ICE data showed. The weekly drop of more than 65 percent was the steepest since July 2011, according to data compiled by Reuters.

A big drop in exchange stocks was expected by many following a large July delivery, as reported previously by Reuters.

(Reporting by Chris Prentice; Editing by Marguerita Choy)