Troubleshoot soft shadows do not render correctly when Simple Shadow Method is used
 
 
 

If you select Simple as your Shadow Method (under mental ray tabs, Quality tab, Shadows section), you are limited to only one shadow ray per light source. Soft shadows, however, require more than one shadow ray to be cast and volume shadowing must be applied to each ray to obtain proper soft shadows from volumes, particles or fluids.

Workaround

Select the Segments Shadow Method instead.