June 20 (Reuters) -ICE cotton futures were little changed on Thursday, buoyed by buying activity from mills, although a higher U.S. dollar kept gains in check ahead of a federal weekly export sales report.

* Cotton contracts for December CTZ4 rose 0.05 cent, or 0.1%, at 72.81 cents per lb at 12:46 p.m. EDT (1646 GMT).

* Prices jumped 1.4% on Tuesday, bouncing from a more than three-and-a-half-year low hit on Monday.

* "More active buying from bargain hunters has been noted this week, with some mills trying to price Q4 coverage at these multi-year lows," said Valentin Olah, risk management consultant at StoneX Group.

* "Comparatively, versus last month's demand conditions, it is surely optimistic to see 70.00 cents holding while deals are getting booked. We still do not rule out 68.00 just yet" Olah added.

* India on Wednesday raised the government-mandated price also known as the minimum support price (MSP) for summer-sown crops including cotton. MSP for cotton was raised by 501 Indian rupees.

* "With the hike in India's MSP, +7%, considering import duty of 11%, mills can buy Brazil and some U.S. qualities at parity, which has the potential to lend price support, provided that imports from that country increase," Olah said.

* Oil futures hit a seven-week high, making cotton-substitute polyester more expensive. O/R

* Meanwhile, the dollar =USD rose 0.4% against its rivals, making cotton more expensive for other currency holders. USD/

* Investors are watching out for the weekly export sales report from the U.S. Department of Agriculture (USDA) due on Friday, delayed by a day due to the Juneteenth holiday.

* In wider agricultural markets, Chicago wheat futures fell further to two-month lows as traders remained focused on U.S. harvest progress and improved production prospects among other major exporters. GRA/

Reporting by Anmol Choubey in Bengaluru; Editing by Shailesh Kuber.