* Technical selling could limit gains

* India could see more monsoon rain - forecasters

NEW YORK Aug 28 (Reuters) - Cotton futures dropped more than 1 percent on Thursday, retreating from their previous session's one-month high, as forecasts of rain in the dry and hot U.S. Southwest and Southeast growing regions eased supply worries.

The benchmark December cotton contract on ICE Futures U.S. closed down 0.88 cent, or 1.3 percent, at 66.58 cents a lb.

"There is a very good chance West Texas could receive rain today and Georgia could also get some rain this weekend," said Keith Brown, a broker at Georgia-based Keith Brown & Co.

Also weighing on cotton futures were forecasts that India's monsoon is expected to provide more rain next week, aiding crops in northwest and central growing areas.

Traders said the market largely ignored encouraging weekly U.S. upland cotton export data earlier Thursday.

Technical selling could pressure fiber, as the December contract has not broken its 50-day moving average at about 68 cents a lb since May, traders said.

Cotton prices are on track for a 6 percent gain in August after hitting a near five-year low of 62.02 cents a lb at the start of the month. (Reporting by Frank Tang; Editing by Tom Brown)