July 14 (Reuters) - ICE cotton futures inched up on Friday, supported by a weaker dollar and a jump in grains markets, after hitting a nearly three-week low early in the session.

Cotton contracts for December settled up 0.21 cent, or 0.32 percent, at 66.58 cents per lb, after touching 66.28 cents, its lowest since June 26. The dollar index was down 0.61 percent. The Thomson Reuters CoreCommodity CRB Index , which tracks 19 commodities, was up 1.11 percent. U.S. corn and soybean futures jumped more than 1 percent on Friday on bargain buying after steep losses during the past two sessions.

"The rise in grains side was a bit supportive, but mostly it was a sort of a nothing day (on Friday). ... The speculators don't want to come and play big on the long side until the next WASDE report or until the weather changes," said Louis Rose, an independent cotton trader and consultant with Risk Analytics in Memphis.

"It is getting hotter and drier across the belt at west Texas. This weekend we might get some rains and we need to see what happens. ... We might drop below 65 cents if we get large rains."

Speculators reduced a bullish stance in cotton for the eighth straight week, U.S. Commodity Futures Trading Commission data showed on Friday. They reduced a bullish stance in cotton by 4,592 lots to 20,821 lots in the week to July 11, the data showed.

That marked the smallest net long stance in the fiber in over a year. Total futures market volume fell by 4,568 to 14,651 lots. Data showed total open interest gained 3,021 to 214,759 contracts in the previous session. Certificated cotton stocks deliverable as of 13JUL17 totaled 66,825 480-lb bales, down from 72,473 in the previous session.

(Reporting by Nallur Sethuraman in Bengaluru; Editing by Richard Chang)