May 17 (Reuters) -ICE cotton futures rose on Wednesday to touch their highest in close to a month driven by expectations for better demand, while also drawing support from improved sentiment across wider markets.

* The most active first-month July cotton contract CTc1 rose 0.42 cent, or 0.5%, to 83.8 cents per lb by 10:41 a.m. EDT (1441 GMT).

* The market is stronger as "it continues to trade on some of the technical indicators and then a little bit on just the prospects for improving demand in the upcoming season," said Bailey Thomen, cotton risk management associate at StoneX Group.

* Also helping cotton, U.S. stock indexes and oil prices rose. .N O/R

* Higher oil prices makes polyester, a cotton substitute, more expensive.

* Focus now shifts to the U.S. Department of Agriculture's (USDA) weekly export sales report due on Thursday.

* Last week the USDA's report showed net sales of 246,800 running bales (RB) of cotton for 2022/2023, up 7% from the previous week and 56% from the prior 4-week average. EXP/COT

* However, Chicago wheat turned lower after a report that Russia had agreed to an extension of the Black Sea grain deal allowing shipments from Ukraine ahead of a Thursday deadline. GRA/

Reporting by Rahul Paswan in Bengaluru; Editing by Shweta Agarwal