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Soil moisture is a measure of the water content within the ground.  It is commonly expressed as a percentage of the soil water content compared with the water that the ground could hold when fully saturated.  The evaluation and prediction of soil moisture is important as this governs the efficiency of evapotranspiration from vegetation.  Thus:   

• If soil moisture content is too little (below the Permanent Wilting Point, PWP) the soil is dry.  The plant cannot extract any more water and dies.
• Higher soil moisture implies greater evapotranspiration efficiency.  This reaches a maximum at Field Capacity (CAP) when the soil is wet and contains all the water it can hold against gravity.  Not all water drains through the soil and some moisture is retained within the soil pores and cavities.  The soil is said to be at Field Capacity when large soil pores are filled with both air and water while the smaller pores are still full of water.  These conditions are considered ideal for crop growth and plants flourish best. 
• As soil moisture increases beyond Field Capacity the efficiency of plant evapotranspiration stays remains the same or decreases.
• The soil is said to be at full saturation Full Saturation (SAT) when all soil pores, large and small, are filled with water.   Flooding is possible as a result of additional precipitation. 

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Fig2.1.14: Measurements from the Soil Moisture and Ocean Salinity satellite mission (SMOS)  polar orbiter satellite data.  At L-band frequency (1.4 GHz) the surface emission is strongly related to soil moisture over continental surfaces. Surface radiation at this frequency is influenced by the vegetation layer (and hence soil moisture if the vegetation type is known), but proximity of lakes etc cause difficulties with interpretation.

Considerations

• Soil Actual soil characteristics can be very variable vary widely within a grid box.  Users and forecasters should take into account the peculiarities of a location when interpreting model output.
• The assigned average soil type for a grid box is not necessarily representative of an individual location.
• Runoff can be up to 30% of rainfall in complex orography or mountainous regions. 

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(Note: In older material there may be references to issues that have subsequently been addressed)

• Read more on Soil Moisture and Evapotranspiration Efficiency with example chart.