Nov 28 (Reuters) -ICE cotton futures were on track for their biggest daily percentage gain in over a month on Tuesday, driven by a weaker dollar while an upbeat sentiment in the oil and grains market also seeped into the natural fiber.

* The second-month March contract CTc2 rose 0.64 cents, or 0.8%, at 79.9 cents per lb at 11:38 am EST (1638 GMT). Prices were down by 2.1% in the previous session.

* The dollar index .DXY was down 0.5%, making cotton more attractive to buyers holding other currencies. USD/

* "We just got a little rebound after yesterday's quiet day, the markets being back up has helped business for cotton," said Jim Nunn, owner of Tennessee-based cotton brokerage Nunn Cotton, adding that supporting the cotton market, the dollar is down while soybeans are up.

* "If we get the market above the 20-day moving average at 80.64 cents, then that's going to be positive for cotton."

* Oil prices rose as the possibility that OPEC+ will extend or deepen supply cuts was compounded by a storm-related drop in Kazakh oil output to send the Brent benchmark above $80 a barrel.

* Higher oil prices make polyester, a substitute for cotton, more expensive. O/R

* In the grain market, soybeans rose as participants assessed rain forecasts in top exporter Brazil, where dry weather is threatening to cut yields while Chicago wheat edged higher and corn steadied.

* Around 83% of the U.S. cotton crop had been harvested as of the week ended Nov. 26, compared with 77% in the prior week, according to the U.S. Department of Agriculture's weekly crop progress report. US/COT

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