2. Open your Processing Menu (LT and up on d-pad, then over to the left with analog stick, selecting Processing)
3. Tab over to Heating. Select A to open your pocket inventory.
4. Select the stack of cotton or flax.
5. Hit Y to confirm Let it cook. Walk away, go to sleep, or watch it - it will processes until your material is gone. I did this in a few sessions while I was sleeping.