Feb 26 (Reuters) - U.S. cotton futures slid for a second straight day on Wednesday as speculators who had bulked up on the fiber offloaded more positions, while millers were mostly averse to buying at prices offered believing the market would fall further.

Caution over how the market would react to weekly export and sale numbers of U.S cotton due on Thursday also put buyers on the defensive, traders said.

The most-active May cotton contract on ICE Futures U.S. settled down 0.98 cent, or 1.1 percent at 86.37 cents per lb. During the session, it hit a 3-week low of 86.25 cents.

Trading volumes were about 30 percent below the 30-day average, Thomson Reuters data showed.

On Tuesday, May cotton fell 2 percent, for its sharpest drop in a day since Jan. 27.

"We have the weekly export numbers out tomorrow, and the market isn't expecting sales to be too that high," said Sharon Johnson, senior cotton analyst at KCG Futures in Roswell, Georgia.

"Meanwhile, speculators are liquidating and mills see no reason to rush in and buy as they reckon the market will work itself gradually lower."

Cotton was one of the better-performing commodities of 2013, gaining 13 percent mostly on a November-December rally, after a pickup in U.S. sales cut sharply into inventories.

The market had started out strongly again this year, rising 6 percent year-to-date until Monday's session. But the selloff of the past two days has sharply cut into the annual gain, bringing it to just around 2.3 percent.

Johnson pegged support for May cotton at 85.50 cents. She put resistance at Monday's six-month high of 90.44. (Reporting by Barani Krishnan; Editing by Bernard Orr )