The composition of the soil particles determines how much moisture soil can hold. A sandy soil has ample open space between the particles to hold a large amount of water, but the larger particles also allow water to freely flow, which quickly drains the soil. Soils that are mostly clay have little space to retain water, but once water gets into the spaces, it can stay for a longer period than with sand. A balance between the two particle sizes, with a measure of organic material such as compost, gives soil the best opportunity to retain moisture.
Water retains heat well, and moist soil also retains heat. However, moist soil takes longer to warm up, as it loses the solar energy through evaporation. Moist soil slowly warms during the day and retains heat at night, while dry soil heats quickly during the day and loses its heat as quickly during the night. Clay or heavily organic soil, with its ability to hold water, heats up faster than ordinary soil and keeps the heat longer.
Water moves through soil in two ways -- gravity and capillary action. Gravity forces water downward, away from the surface. Evaporation from the surface of the soil brings water upward by surface tension, or capillary action. As the sun dries the surface of the soil, aided by the wind, the water evaporates. Water tends to stick to water, so as the water on the surface pulls away from the soil, it brings the water a little lower than itself up to the surface. This in turn, brings more water up from below. After time, much of the water has been lifted upward and evaporated.
Rain falls to the soil as part of the water cycle. The rain water now in the soil provides the micro-bacteria and soil fauna the proper conditions to survive, and they in turn break down the minerals in the soil and organic material to provide the proper chemical nutrition the plants need for energy and growth. The chemicals are transported via capillary action from the roots through the stem and to the leaves. The leaves lose water into the air from transpiration; the water then falls again as rain to start the cycle over.