A competition yellow is usually called about 25 laps into a Nascar race so the teams can check tire wear. This is done after overnight or early morning rain washes off all of the rubber on the track before a race starts. There have also been competition yellows used in the past after tracks were newly paved. It takes away the unknown, regarding dangerous tire issues.
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It depends on how big the track is. Like Bristol is 500 laps around because the track is as big as a middle school track. The Daytona 500 has 200 laps, because it's as big as a football field.
A caution will be thrown out for a competition lap. The whole field will come down pit road to pit to make everyone be on the same page.