May 4 (Reuters) - ICE (NYSE:ICE) cotton futures slipped over 1% on Tuesday as key growing areas in Texas received rain, while the market kept a wary eye on a worsening pandemic in major consumer India.

* Cotton contracts for July CTN1 fell 1.23 cents, or 1.4%, to 86.63 cents per lb, by 13:15 p.m. EDT (1715 GMT).

* "We had good rains in key production areas in Texas last night, which is maybe a change in the weather pattern," and that is an encouraging sign for production, weighing on prices, said Jordan Lea, senior trader at DECA Global.

* However, the market is still generally bullish as the supply situation is pretty tight, Lea said.

* Cotton is a water-intensive crop and an increase in rainfall, especially in regions hit by dry weather recently, could help growing conditions, boosting supply.

* The U.S. dollar strengthened on Tuesday, making it more expensive for buyers holding other currencies to purchase greenback-priced cotton, hurting demand. USD/

* Global production for 2020/21 is estimated at 24.6 million tonnes, led by India, while worldwide consumption is estimated at 25 million tonnes, led by China, the International Cotton Advisory Committee (ICAC) said in a report on Monday.

* These fundamentals would typically support an increase in prices but U.S. restrictions on cotton from Xinjiang could put stress on global supply chains, the report said.

* The U.S. will urge its Group of Seven allies, who meet this week, to increase pressure on China over the use of forced labor in its northwestern Xinjiang province, home to the Muslim Uighur minority. If India, which is one of cotton's biggest consumers, goes into full lockdown and "similar circumstances possibly spill into Bangladesh, Thailand, Laos and Cambodia, that would definitely slow demand and start to put some pressure on prices," Lea added.

* As coronavirus cases in India surpassed 20 million, Prime Minister Narendra Modi's government remains reluctant to impose a national lockdown for fear of the economic fallout, even as several states have already imposed curbs.