Oct 5 (Reuters) - ICE cotton futures fell on Thursday, as concerns of crop damage in the United States due to Tropical Storm Nate waned and on weaker export sales data.

Cotton contracts for December settled down 0.53 cent, or 0.77 percent, at 68.27 cents per lb. It traded within a range of 68.1 and 69.45 cents a lb. "The current path (of Tropical Storm Nate) would likely spare the U.S. cotton crop from much damage as there just isn't a whole lot of cotton in the eye of the current path," Ron Lee, general manager at McCleskey Cotton in Bronwood, Georgia, said in a note.

Tropical Storm Nate unleashed intense rainfall across much of Central America on Thursday, killing at least three people in Costa Rica as it headed for the U.S. Gulf Coast where it is expected to strike as a hurricane this weekend.

Prices climbed nearly 2 percent on Wednesday as investors covered short positions on concerns over potential crop damage due to the storm. "There was an over-reaction to the tropical storm on Wednesday," said Rogers Varner, president of Varner Brokerage in Cleveland, Mississippi.

The U.S. Department of Agriculture on Thursday reported net upland sales of 161,000 running bales (RB) for the 2017-18 marketing year for the week ended Sept. 28, down 17 percent from the previous week. Exports of 114,900 RB were down 13 percent from the previous week and 21 percent from the prior four-week average, as per the report. "The export sales were not as strong as we thought they would be," said Louis Rose, co-founder and director of research and analytics at Rose Commodity.

Total futures market volume fell by 17,191 to 17,654 lots. Data showed total open interest gained 828 to 230,331 contracts in the previous session. Certificated cotton stocks deliverable as of Oct. 4 totaled 4,717 480-lb bales, up from 4,234 in the previous session.

The dollar index was up 0.52 percent. The Thomson Reuters CoreCommodity CRB Index , which tracks 19 commodities, was up 0.91 percent.

(Reporting by Eileen Soreng in Bengaluru; Editing by Leslie Adler