Those yellow things are the cocoons of the silk worms. After they form these cocoons they put them outside in the sun so the worms will die. That's right - gasp - it's murder! I wonder if all those animal activists know about this...
After they know the worms are dead they boil the cocoons and they start to dissolve into whispy hairs which they take and spool into thread. No wonder silk is expensive! But I don't know why it stains when it gets wet - would anyone like to commet on that?