U.S. cotton stocks at the end of 1988/89 marketing year are expected to increase to 9.2 million bales, the second largest surplus in 20 years. High stock levels dominate the outlook for the remainder of this season as well as the 1989/90 marketing year. Although the 1989 cotton program will again limit planted acreage and both mill use and exports are expected to rebound, it may take several years to reduce carryover supplies to the desired level.