Updates with midday prices, trader's comments

KUALA LUMPUR, Sept 18 (Reuters) -Malaysian palm oil futures rose on Wednesday as traders covered their short positions amid poor weather conditions in the world's second-largest producer, with strength in rival oils also lending support.

The benchmark palm oil contract FCPOc3 for December delivery on the Bursa Malaysia Derivatives Exchange gained 64 ringgit, or 1.71%, to 3,800 ringgit ($896.65) a metric ton by the midday break.

The recovery in palm oil was due to reduced production capacity caused by poor weather conditions, especially in the northern peninsular states, said Paramalingam Supramaniam, director at Selangor-based brokerage Pelindung Bestari.

"This resulted in short-covering in the market today," Supramaniam said,referring to traders buying back borrowed securities to close out open short positions at a profit or loss.

Malaysia's meteorology department on Monday issued a continuous rain warning for four states in the north of the country until Sept. 21, with other states forecast to experience thunderstorms, heavy rain and strong winds.

Dalian's most-active soyoil contract DBYcv1 rose 1.3%, while its palm oil contract DCPcv1 added 0.94%. Soyoil prices on the Chicago Board of Trade BOcv1 were up 1.05%.

Palm oil tracks price movements in rival edible oils as they compete for a share in the global vegetable oils market.

Cargo surveyors estimated exports of Malaysian palm oil products during Sept. 1-15 rose between 9.1% and 10.2% from a month ago.

Oil prices fell on Wednesday and were set to snap a two-session winning streak ahead of a likely interest rate cut by the U.S. Federal Reserve, as weak macroeconomic data weighed on demand despite the potential for more violence in the Middle East. O/R

Brent crude futures LCOc1 for November were down 0.6% at $73.25 a barrel as of 0458 GMT. Weaker crude oil futures make palm a less attractive option for biodiesel feedstock.

The ringgit MYR=, palm's currency of trade, strengthened 0.38% against the dollar, making the commodity more expensive for buyers holding foreign currencies and capping gains.

Palm oil may break resistance at 3,784 ringgit per metric ton, and rise towards 3,864 ringgit, Reuters technical analyst Wang Tao said. TECH/C

($1 = 4.2380 ringgit)

Reporting by Danial Azhar; Editing by Subhranshu Sahu and Varun H K

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European edible oil prices/trades OILS/E