May 25 (Reuters) - ICE cotton futures were little changed on Thursday after a weekly government report showed lower-than-expected export cancellations.

"The export cancellations were not as bad as expected ... It is just a question of whether speculators stop selling and getting out of longs or not. At the moment it looks like they will hold on to their positions and we might see a rebound coming," Peter Egli, director of risk management at British merchant Plexus Cotton.

Net upland sales for the 2016-17 crop last week totaled 16,200 running bales (RB), down 87 percent from the previous week, weekly export sales data from the U.S. Department of Agriculture showed on Thursday.

However, export cancellations were below market expectations with reductions of 11,500 RB from India and 4,300 RB from Bangladesh against previous week's reductions of 23,300 RB and 12,800 RB from India and Japan.

"The speculators are getting and buying their shorts back. That's why the market is finding a balance here. I don't see the market selling off too hot and speculators liquidating a big amount," Egli said.

"There is not much reason for the prices to go much higher and lower."

The December cotton contract on ICE futures U.S. settled up 0.14 cent, or 0.19 percent, at 73.22 cents per lb. It traded within a range of 72.61 and 73.47 cents a lb.

Meanwhile, the July cotton contract settled down 0.5 percent at 77.16 cents per lb.

Traders said index funds rolled over positions from July to December, making use of a surge in prices.

The July contract hit a high of 78.14 cents after the export sales report and finally settled lower.

Certificated cotton stocks deliverable as of May 24 totaled 418,593 480-lb bales, up from 411,726 in the previous session.

The dollar index was up 0.04 percent. The Thomson Reuters CoreCommodity CRB Index, which tracks 19 commodities, was down 1.50 percent. (Reporting by Nallur Sethuraman in Bengaluru; Editing by Jeffrey Benkoe)