since it was raining

[waverider]

- They had to cancel the picnic plans since it was raining all day.

In this original sentence, can I use the simple past tense "was"?

 

[Tarheel]

You need the past perfect. Say:

They had to cancel their picnic plans since it had been raining all day.

 

[jutfrank]

Your use of all day suggests that you're talking about the weather conditions prior to the cancellation, so past perfect is the the tense to use. The past perfect provides background context that explains the decision to cancel the picnic.