Soil volumetric heat capacity is the amount of energy required to raise the temperature of a unit volume of soil by one degree. Unlike thermal conductivity, volumetric heat capacity increases strictly linearly as soil water content increases. Volumetric heat capacity is also a linear function of bulk density.
To increase the temperature of wetter, denser soil requires more energy than to increase the temperature of drier, less dense soil, which has a lower volumetric heat capacity. This is one factor that can contribute to lower soil temperatures.