When you knit in the round, you knit a tube. Are you using a pattern? Most in-the-round bag patterns I've seen have you knit the bottom flat and then pick up stitches around the edge on a circular needle. Then you can knit the sides up in a continuous circle.
"Trust the pattern!"
Time flies like an arrow, but fruit flies like a banana.
Hop aboard while we follow the cloud-covered van of knitting harmony, man!! Woooo!! --Hedgehog
IngridKH on Ravelry