is it possible to generate electricty using metal rods placed into the soil?

Yes. Possible but not practical. If you inserted two rods made of dissimilar metal (eg copper and zinc) into very damp soil, or anything containing impure water, it would act as a battery (cell, actually) and produce a voltage of around 1.5 volts. The current would be low, due to the high resistance of the ground, and the metal would soon corrode, further limiting the current.

As an experiment, you could run an lcd clock off two wires stuck in a potato or lemon.

Sure...as long as the soil is damp enough to move electrons and the pH is such that an oxidation reaction can take place at the electrode and reduction reaction can take place at the anode. Potato batteries work, so a soil battery can too, if you have the right conditions in the soil (it won't work in dry dirt, and only in wet soil if the pH is right and the metals are appropriately selected). If the pH is not right (suppose you damp down the soil with a strong sodium hydroxide solution) you won't generate any EMF between the would be anode and cathode because you will not have an electron sink at the would be cathode.

soil alone is a poor conductor of electricity,so will not be able to generate any power unless the soil has water in it .

Yes under the right conditions..