For your first project I suggest you use a worsted weight wool and at least a US sz 8 needle, 9 or 10 might be better. You don't want to use a size 3 needle with a fatter yarn, save the small sizes for when you're ready to work with finer yarn for things like socks. One more thing, if you don't use a pattern, you probably won't want to work the whole thing in stockinette stitch, that's where you knit a row, purl a row, and continue alternating, as it will curl. There are ways to avoid the worst of the curling, ask if you're wanting to use stockinette stitch. Welcome to Knitting Help and the wonderful, wacky world of knitting!
Happiness is catching that dropped stitch while it's still fixable..