The most common and most likely answer to this crossword clue is the 8 letter word SPINNING
I've seen this crossword clue in The Daily Telegraph
S
P
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N
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More clues leading to the result SPINNING
Buddy explains!

The straight part
We know that "it should make a good yarn" is the straight/definition part of the clue. The straight part is often a synonym or definition, in this case it should make a good yarn = spinning.The cryptic/wordplay part
In cryptic crossword there's often an wordplay/cryptic part as well.This part involves a more complex hint, such as an anagram, homophone, hidden word, etc.
Sadly, We don't have an explanation for this specific crossword clue yet.
What does SPINNING mean?
SPINNING verb- To rotate, revolve, gyrate (usually quickly); to partially or completely rotate to face another direction.
- To make yarn by twisting and winding fibers together.
- To present, describe, or interpret, or to introduce a bias or slant, so as to give something a favorable or advantageous appearance.
- (of a bowler) To make the ball move sideways when it bounces on the pitch.
- (of a ball) To move sideways when bouncing.
- To form into thin strips or ribbons, as with sugar
- To form (a web, a cocoon, silk, etc.) from threads produced by the extrusion of a viscid, transparent liquid, which hardens on coming into contact with the air; said of the spider, the silkworm, etc.
- To shape, as malleable sheet metal, into a hollow form, by bending or buckling it by pressing against it with a smooth hand tool or roller while the metal revolves, as in a lathe.
- To move swiftly.
- To stream or issue in a thread or a small current or jet.
- To wait in a loop until some condition becomes true.
- To play (vinyl records, etc.) as a disc jockey.
- To use an exercise bicycle, especially as part of a gym class.
- An abnormal condition in journal bearings where the bearing seizes to the shaft that is rotating and rotates inside the journal, destroying both the shaft and the journal.
- The motion of something that spins.
- The process of converting fibres into yarn or thread.
- Indoor cycling on an exercise bicycle.
- Rapidly rotating on an axis; whirling.