Cashmere is fantastic for baby blankets. It makes a truly special gift which should become an heirloom. BUT, it's also a total PITA to hand wash and dry a baby blanket which 2 seconds later has baby puke on it again.
I like nice machine washable yarns for babies. Sirdar Snuggly is a nice acrylic that's super soft. Dale Baby Ull is a machine washable merino that's very high quality.