One's woolly reasoning, at first - it holds water (4)
I believe the answer is:
ewer
'it holds water' is the definition.
(I've seen this in another clue)
'one's woolly reasoning at first' is the wordplay.
'one's woolly' becomes 'ewe' (I can't justify this - if you can you should believe this answer much more).
'at first' indicates taking the first letters.
The initial letter of 'reasoning' is 'r'.
'ewe'+'r'='EWER'
Can you help me to learn more?
(Other definitions for ewer that I've seen before include "Large, wide-mouthed jug" , "A wide-lipped jug" , "29 [VESSEL]" , "Big jug" , "Large pitcher" .)