Cotton futures retreat under pressure from index fund roll

* Fiber prices fall back from 6-month highs

* Volumes heavy as traders roll positions from March

* USDA export data shows canceled bales from China

Cotton futures eased on Thursday in heavy trading, retreating from the previous session's 6-month highs, under pressure from the rolling of closely-watched commodities index funds.

The most-active May cotton ontract on ICE Futures U.S. edged down 0.27 cent, or 0.3 percent, to settle at 88.58 cents a lb.

The spot March contract fell more sharply, finishing down 0.77 cent, or 0.9 percent, at 87.60 cents a lb.

Volumes were heavy throughout the session as traders moved positions from the March contract into May.

"There wasn't anyone to offset the index fund activity," said Sharon Johnson, a cotton specialist with KCG Futures in Atlanta, of the day's heavy selling.

The pressure in the spot month pushed its discount to 0.98 cents a lb below the second-month, from 0.48 cent a lb previously to its biggest discount since December.

Weekly U.S. Department of Agriculture export data showed that sales of upland cotton fell 33 percent from the previous week to 120,300 running bales and included cancellations from buyers in top consumer China.

Even as high prices have dented demand, the data showed shipment levels were strong and the world's top exporter remained poised to outpace the USDA's export forecast for the 2013/14 crop year that ends July 31.

Exchange stocks rose to 244,800 bales, ticking up from 242,900 previously to the highest since July, according to ICE data compiled by Reuters. (Reporting by Chris Prentice; Editing by Nick Zieminski)