Whatever it is, it's never mentioned again.
Hagrid doesn't say what it is at any point, and he isn't mentioned wearing or otherwise using anything yellow and knitted at any point in time, though he does have a yellow-and-orange tie.
“Averting his eyes from this unpleasant sight, Harry saw a gigantic, hairy brown suit and a very horrible yellow and orange tie hanging from the top of Hagrid’s wardrobe door.”
- Harry Potter and the Prisoner of Azkaban, Chapter 14 (Snape's Grudge)
He's also mentioned as darning his socks with yellow yarn. It's possible that he had been knitting a yellow sock, though a sock might not look like a circus tent. Hagrid would need big socks, so perhaps that's what he was knitting.
“A light rain had started to fall by mid-afternoon; it was very cosy sitting by the fire, listening to the gentle patter of the drops on the window, watching Hagrid darning his socks and arguing with Hermione about house-elves – for he flatly refused to join S.P.E.W. when she showed him her badges.
‘It’d be doin’ ’em an unkindness, Hermione,’ he said gravely, threading a massive bone needle with thick yellow yarn.”
- Harry Potter and the Goblet of Fire, Chapter 16 (The Goblet of Fire)
He's much larger than an average man, and Hagrid's feet are (in a very odd size comparison) said to be the size of baby dolphins.
“He was almost twice as tall as a normal man and at least five times as wide. He looked simply too big to be allowed, and so wild – long tangles of bushy black hair and beard hid most of his face, he had hands the size of dustbin lids and his feet in their leather boots were like baby dolphins.”
- Harry Potter and the Philosopher's Stone, Chapter 1 (The Boy who Lived)
If we consider this description to be scientifically accurate, that would mean Hagrid's feet are around 39 to 53 inches, since that's the size of the average baby dolphin. It's possible that Harry could have thought a sock that size, especially if it was knitted in a fairly basic shape, looked like a circus tent.