Inelastic neutron scattering (INS) is an emerging modality for in situ, non-destructive soil carbon analysis. It is based on spectroscopy of gamma rays induced by fast (14 MeV) neutrons. The measured yield of the carbon signal is affected by the variations in the soil bulk density and moisture, thus affecting the sampled depth and volume. We present here results of Monte Carlo simulations of the INS system response to variations in these two parameters.  We varied the soil bulk density from 0.5 to 2 g/cm³ and the moisture content from 0 to 50% by weight. Noticeable effects on gamma ray yield were observed for this range of variability in the bulk density. However, within the median average density range (1-1.5 g/cm³) in a given soil the density effect is much reduced. Moisture effect on the neutron propagation occurs mainly at low energies. Thus INS being a threshold process that which occurs only at higher neutron energies moisture content does not have a dramatic effect on carbon measurements. Increased moisture content increases the soil bulk density therefore affecting the signal yield. A detailed discussion of the soil parameters and their specific effects on the neutron and gamma ray propagation and the resulting effects on the carbon measurements will be presented.