Here is one that I make for the premie nursery of a local hospital.
Using baby yarn and size 7 needles (I use double points so that I don't have to sew a seam) cast on 60 sts. Work K2,P2 ribbing for six rows. Change to stockinette stitch and knit until 5 inches from cast on row. Knit 2 together around. Knit next row. Knit 2 together around. Clip yarn leaving a long enough tail to bring back through stitches, pull tight and down through hole in middle. Make pompon, pulling threads down through cap and tie with yarn tail of cap. Weave in ends and clip.
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