Once China’s buying program began, their stocks exploded, he adds.

“If you take China out of the picture, ending stocks on the global scene look pretty consistent, in that 50 million-bale range, or 50 percent of total ending stocks.”

Global stocks have been growing, but for the most part, production and use are hand-in-hand, says Riley.

“Typically, we’re using as much as we produce, but for the past couple of years we’ve been at about 10 million fewer bales than production. For the most part, we’re using all that we produce, but we’ve also got these huge stocks that we must deal with,” he says.

December cotton futures are better than where they were a year ago, notes Riley, but other commodities prices were skyrocketing while cotton prices declined. Cotton production was not nearly as impacted by drought last year compared to other crops, he says.

“Cotton prices, for the most part, were tracking up at the first of the year even as the dollar was strengthening. It was all because of China. During this time period, China was encouraging its mills to import cotton. They had a lot of cotton to get rid of, and they were trying to decrease their stocks.

“They told their mills they could buy three bales on the world market, but only if you buy three from our warehouse. They took advantage of that, and even as we had a strengthening U.S. dollar, cotton prices were increasing because China was encouraging imports into their country. It didn’t work because they still had to pay for a tremendous amount of cotton.”

Moving into the summer, the dollar weakened and cotton prices strengthened, and that relationship has held intact pretty well, says Riley. Along about the middle of summer, growers started seeing about a five to six-cent discount for next year’s crop.