Nov 13 (Reuters) -ICE cotton futures were steady on Monday, buoyed by a softer dollar and gains in the grains and oil markets, while lackluster demand capped gains for the natural fiber.

* Cotton contracts for March CTH4 were flat at 79.5 cents per lb at 12:30 (1730 GMT).

* The dollar index .DXY eased 0.2%, making cotton more appealing to overseas buyers. USD/

* "Looks like there's some general rallying in the commodity market due to some buying by funds and other speculators and the dollar is fractionally lower," said Jack Scoville, vice president at Chicago-based Price Futures Group.

* But, "slower demand is capping the cotton prices from going up further."

* Chicago corn and Chicago soybean futures rose. While oil prices rose after OPEC report that countered market concern over waning demand in the United States and China. GRA/ O/R

* Lower oil prices make cotton-substitute polyester more expensive.
* Last week,the USDA's weekly export sales report showed net sales of 395,200 running bales (RB) of cotton for 2023/2024, down 14% from the previous week but up noticeably from the prior four-week average. EXP/COT

* "Abundant rains across the Coastal Bend, Delta, and southern portions of the Southeast this week will slow remaining cotton harvesting," weather forecaster Maxar wrote in a weekly note.

* The USDA in its November World Agricultural Supply and Demand Estimates report raised expected U.S. production in 2023/24 by 273,000 bales andsaw global ending stocks up by 1.6 million bales, while also cutting the world's consumption estimate by 500,000 bales.

Reporting by Sherin Elizabeth Varghese in Bengaluru; Editing by Shailesh Kuber