Nov 12 (Reuters) -ICE cotton futures fell on Tuesday as investors rolled over their positions from the front-month contract, with a stronger U.S. dollar and a drop in the Chicago grains market also weighing on the natural fiber.

* Cotton contracts for December CTZ4 fell 0.59 cent, or 0.85%, to 69.1 cents per lb at 11:00 a.m. ET (1600 GMT).

* "I think this is normal trade flow coming to the end of the contract. I believe that the index roll is causing some weakness in the front of the board. You do have a large short in the market that seems to be adding on to the March contract as we see this roll happening," said Louis Barbera, partner and analyst at VLM Commodities.

* "The dollar made its move once Trump got elected. And I think everything else has been reactionary."

* The U.S. dollar =USD rose to a four-month peak versus major peers. A stronger greenback makes cotton less appealing for buyers holding other currencies. USD/

* Chicago wheat futures slipped back towards a two-month low hit in the previous session as a strengthening dollar made U.S. crops less competitive and forecasts for more rain in the dry U.S. Plains improved the outlook for crop production.

* Soybean futures also dipped as a rally in soyoil prices faltered. GRA/

* Oil prices steadied, recovering from a 5% drop over the previous two sessions, as investors absorbed OPEC's latest downward revision for oil demand and the market's disappointment over China's latest stimulus plan. O/R

* Lower oil prices make cotton-substitute polyester less expensive.

* Wall Street's main indexes were little changed following post-election gains as focus moved to key U.S. inflation data later in the week for more signals on the country's economic and monetary policy outlook. .N

Reporting by Anjana Anil in Bengaluru; Editing by Shreya Biswas