Can metal rods detect underground wires?

Yes. Current running through the underground wires create a circular magnetic field along the axis of the wire. Any moving metal structure in the proximity of the magnetic field will induce a current in the metal and this will create an opposing magnetic field. The opposing magnetic fields create a torque similar to the way torque is generated in a DC motor, and this will cause the metal to rotate towards a point of equilibrium, which for the rod is when it's parallel to the wire - assuming the run of wire is also straight.

Incidentally it was the movement of current carrying wires in close proximity to one another that led to the discovery of electromotive force.

The phenomenon is maybe due to small disturbance in the magnetic field of earth. Rods will move the same above any area, where ground is mostly uniform but there's a small touched up patch, like a covered up ditch or a cable or drainage pipe laid down with a plough, etc.