1. First of all open a new document and choose size 300pixel by 300pixel.
Here we are going to leave the background white. So select a new Layer and with the help of Paint Bucket Tool fill with the color #788902. Now with the Lasso Tool create a new shape as you can see in the image below.
2. Press ctrl+T on the selection and then press Shift+Alt with the help of Mouse to decrease the size of the Selection. As shown below.
3. After making the selection smaller, select a New Layer and fill it with the color #5D7BA1with the help of Paint Bucket Tool in the selection.
4. Here click on the Layer1, then press ctrl and click on Layer2 with the Mouse and delete it.
5. Now click on the Layer2 and go to the Filter > Noise > click on Add Noise and adjust everything according to the image below.
6. Now go to Filter > Distort > click on Glass and select Distortion, smoothness, Texture and scaling as shown in the image.
Distortion = 3
Smoothness = 4
Texture = Block
Scaling = 75%
7. Our final image is the texture of denim cloth







More Photoshop: