* Cotton eases in sympathy with falling soybeans

* ICE stocks climb to highest since July

* Trading volumes heavy due to fund roll

NEW YORK, Feb 12 (Reuters) - Cotton futures retreated from 6-month highs on Wednesday, hurt by falling soybeans and a rising U.S. dollar.

The most-active May cotton contract on ICE Futures U.S. closed down 0.35 cent, or 0.4 percent, at 88.85 cents a lb after climbing to 89.67 cents, the highest price for the second-month since August.

The spot March contract fell in lock step, finishing the day down 0.3 cent, or 0.3 percent, at 88.37 cents a lb after touching a six-month spot-contract high of 89.31 cents.

Volumes were heavy as traders rolled positions out of March and into May.

Soybeans fell due to waning demand in China, pressuring cotton as the crops compete for acreage.

The gaining greenback also weighed, making U.S. dollar-traded commodities more expensive to holders of other currencies.

Rising exchange inventories added pressure.

"The perception has been that we have extremely tight stocks in the United States. It's amazing to me when I watch the (exchange) stocks climb," said Jobe Moss, a broker with MCM Inc. in Lubbock, Texas

ICE inventories reached almost 242,900 bales on Tuesday, up from 235,800 previously to the highest since July, exchange data compiled by Reuters showed.

The recent strong pace of exports seen in weekly U.S. government data has stoked worries over U.S. supplies, as U.S. farmers harvested their smallest crop in four years this season.

Weekly data from the U.S. Department of Agriculture due on Thursday was avidly eyed for signs that high prices have crimped demand.

World inventories are expected to reach a record 96.5 million 480-lb bales by the end of the 2013/14 crop year end-July, the USDA said on Monday.

China's share of global supplies has ballooned on the back of a government stockpiling program launched in 2011, expected to be overhauled in the 2014/15 season. (Reporting by Chris Prentice; Editing by Diane Craft)