NEW YORK: ICE cotton futures fell on Tuesday, after a federal crop progress report showed improvement in the US crop condition, while the market continues to grapple with a dim demand outlook.

Cotton contracts for December fell 0.33 cent, or 0.5%, to 62.95 cents per lb by 1:26 p.m. EDT (1726 GMT).

"With the lack of demand and a stable to improving crop condition, the market is selling off a little bit", said Jack Scoville, vice president at Chicago-based Price Futures Group.

An inability to breach the 64 cents per lb level is weighing on cotton prices further, Scoville added.

The United States Department of Agriculture's (USDA) weekly crop progress report on Monday showed 45% of the crop was in good/excellent condition, up from last week's 42%.

Crop condition in Texas, the largest cotton producing state in the US also improved, with 27% of the crop in good/excellent condition, against last week's 22%.

Hot and dry weather in Texas had sparked fears of crop damage among producers, pushing prices to one-month high earlier in the month.

Prices of the natural fiber are still 10.5% down so far in 2020, driven by low demand and rising tensions between Washington and Beijing.

The coronavirus pandemic hammered demand for apparel and also contributed to an increase in cotton inventories.

Total futures market volume fell by 1,387 to 10,398 lots. Data showed total open interest fell 7 to 193,006 contracts in the previous session.