Try just using clothesline for starters. You could get some cheap at a dollar store, dye it yourself for Christmas if desired, then go!

try the first few rounds of this free pattern,

http://www.beginner-crochet-patterns.com/newsboy-cap-crochet-pattern.html

and for a hole just leave enough extra chains at the beginning as a tail, enough to fit around your stand/trunk. I'm not sure if it would be loose enough to drape over your tree stand, its not that type of project. In that case, I would get a lot of yarn and stitch a lot of increases. It might just be too stiff.