MORGAN STANLEY CHARTER CAMPBELL LP - 10-Q Quarterly Report

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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 10-Q

[X] Quarterly report pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
For the quarterly period ended June 30, 2004 or

[ ] Transition report pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
For the transition period from to__________________

Commission File Number 0-50064

MORGAN STANLEY CHARTER CAMPBELL L.P.

(Exact name of registrant as specified in its charter)

Delaware 01-0710311
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)

Demeter Management Corporation
825 Third Avenue, 9th Floor
New York, NY 10022
(Address of principal executive offices) (Zip Code)

Registrant's telephone number, including area code (212) 310-6444

(Former name, former address, and former fiscal year, if changed
since last report)

Indicate by check-mark whether the registrant (1) has filed all
reports required to be filed by Section 13 or 15(d) of the
Securities Exchange Act of 1934 during the preceding 12 months (or
for such shorter period that the registrant was required to file
such reports), and (2) has been subject to such filing
requirements for the past 90 days.

Yes X No___________

Indicate by check-mark whether the registrant is an accelerated
filer (as defined in Rule 12b-2 of the Exchange Act).

Yes No X

MORGAN STANLEY CHARTER CAMPBELL L.P.

INDEX TO QUARTERLY REPORT ON FORM 10-Q

June 30, 2004

PART I. FINANCIAL INFORMATION

Item 1. Financial Statements

MORGAN STANLEY CHARTER CAMPBELL L.P.
STATEMENTS OF FINANCIAL CONDITION

MORGAN STANLEY CHARTER CAMPBELL L.P.
STATEMENTS OF OPERATIONS
(Unaudited)

MORGAN STANLEY CHARTER CAMPBELL L.P.
STATEMENTS OF OPERATIONS
(Unaudited)

MORGAN STANLEY CHARTER CAMPBELL L.P.
STATEMENTS OF CHANGES IN PARTNERS' CAPITAL
For the Six Months Ended June 30, 2004 and 2003
(Unaudited)

MORGAN STANLEY CHARTER CAMPBELL L.P.
STATEMENTS OF CASH FLOWS
(Unaudited)

MORGAN STANLEY CHARTER CAMPBELL L.P.
NOTES TO FINANCIAL STATEMENTS
June 30, 2004
(Unaudited)
The unaudited financial statements contained herein include, in
the opinion of management, all adjustments necessary for a fair
presentation of the results of operations and financial condition
of Morgan Stanley Charter Campbell L.P. (the "Partnership"). The
financial statements and condensed notes herein should be read in
conjunction with the Partnership's December 31, 2003 Annual Report
on Form 10-K.

1. Organization
Morgan Stanley Charter Campbell L.P. is a Delaware limited
partnership organized to engage primarily in the speculative
trading of futures contracts, options on futures contracts, and
forward contracts on physical commodities and other commodity
interests, including, but not limited to, foreign currencies,
financial instruments, metals, energy, and agricultural products.
The Partnership is one of the Morgan Stanley Charter series of
funds, comprised of the Partnership, Morgan Stanley Charter Graham
L.P., Morgan Stanley Charter Millburn L.P., and Morgan Stanley
Charter MSFCM L.P.

The Partnership's general partner is Demeter Management
Corporation ("Demeter"). The non-clearing commodity broker is
MORGAN STANLEY CHARTER CAMPBELL L.P.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)

Morgan Stanley DW Inc. ("Morgan Stanley DW"). The clearing
commodity brokers are Morgan Stanley & Co. Incorporated ("MS &
Co.") and Morgan Stanley & Co. International Limited ("MSIL").
Demeter, Morgan Stanley DW, MS & Co. and MSIL are wholly-owned
subsidiaries of Morgan Stanley. Campbell & Company, Inc. (the
"Trading Advisor") is the trading advisor to the Partnership.

2. Related Party Transactions
The Partnership's cash is on deposit with Morgan Stanley DW, MS &
Co. and MSIL in futures, forwards, and options trading accounts to
meet margin requirements as needed. Morgan Stanley DW pays
interest on these funds based on a rate equal to that earned by
Morgan Stanley DW on its U.S. Treasury bill investments. In
addition, Morgan Stanley DW pays interest received from MS & Co.
and MSIL with respect to such Partnership's assets deposited as
margin. The Partnership pays brokerage fees to Morgan Stanley DW.

3. Financial Instruments
The Partnership trades futures contracts, options on futures
contracts, and forward contracts on physical commodities and other
commodity interests, including, but not limited to, foreign
currencies, financial instruments, metals, energy, and
agricultural products. Futures and forwards represent contracts
for delayed delivery of an instrument at a specified date and
MORGAN STANLEY CHARTER CAMPBELL L.P.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)

price. Risk arises from changes in the value of these contracts
and the potential inability of counterparties to perform under the
terms of the contracts. There are numerous factors which may
significantly influence the market value of these contracts,
including interest rate volatility.

The market value of contracts is based on closing prices quoted by
the exchange, bank or clearing firm through which the contracts
are traded.

The Partnership's contracts are accounted for on a trade-date
basis and marked to market on a daily basis. The Partnership
accounts for its derivative investments in accordance with the
provisions of Statement of Financial Accounting Standards No. 133,
"Accounting for Derivative Instruments and Hedging Activities"
("SFAS No. 133"). SFAS No. 133 defines a derivative as a
financial instrument or other contract that has all three of the
following characteristics:

1) One or more underlying notional amounts or payment
provisions;
2) Requires no initial net investment or a smaller initial net
investment than would be required relative to changes in
market factors;
MORGAN STANLEY CHARTER CAMPBELL L.P.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)

3) Terms require or permit net settlement.

Generally, derivatives include futures, forward, swaps or options
contracts and other financial instruments with similar
characteristics such as caps, floors, and collars.

The net unrealized gains (losses) on open contracts, reported as a
component of "Equity in futures interests trading accounts" on the
statements of financial condition, and their longest contract
maturities were as follows:
Net Unrealized Gains (Losses)
on Open Contracts Longest Maturities
Exchange- Off-Exchange- Exchange- Off-Exchange-
Date Traded Traded Total Traded Traded
$ $ $

Jun. 30, 2004 (1,545,489) (2,978,826) (4,524,315) Mar. 2005 Sep. 2004
Dec. 31, 2003 1,903,386 3,309,147 5,212,533 Sep. 2004 Mar. 2004

The Partnership has credit risk associated with counterparty non-
performance. The credit risk associated with the instruments in
which the Partnership is involved is limited to the amounts
reflected in the Partnership's statements of financial condition.

The Partnership also has credit risk because Morgan Stanley DW,
MS & Co. and MSIL act as the futures commission merchants or the
counterparties, with respect to most of the Partnership's assets.
Exchange-traded futures, forward, and futures-styled options
contracts are marked to market on a daily basis, with variations
in value settled on a daily basis. Morgan Stanley DW, MS & Co.,
and MSIL, each as a futures commission merchant for the
Partnership's exchange-traded futures, forward, and futures-
styled options contracts, are required, pursuant to regulations
of the Commodity Futures Trading Commission ("CFTC"), to
segregate from their own assets, and for the sole benefit of
their commodity customers, all funds held by them with respect to
exchange-traded futures, forward, and futures-styled options
contracts, including an amount equal to the net unrealized gains
(losses) on all open futures, forward, and futures-styled options
contracts, which funds, in the aggregate, totaled $196,720,863
and $99,731,757 at June 30, 2004 and December 31, 2003,
respectively. With respect to the Partnership's off-exchange-
traded forward currency contracts, there are no daily exchange-
required settlements of variations in value nor is there any
requirement that an amount equal to the net unrealized gains
(losses) on open forward contracts be segregated, however, MS &
Co. and Morgan Stanley DW will make daily settlements of losses
as needed. With respect to those off-exchange-traded forward
currency contracts, the Partnership is at risk to the ability of
MS & Co., the sole counterparty on all such contracts, to
perform. The Partnership has a netting agreement with MS & Co.

MORGAN STANLEY CHARTER CAMPBELL L.P.
NOTES TO FINANCIAL STATEMENTS (CONCLUDED)

This agreement, which seeks to reduce both the Partnership's and
MS & Co.'s exposure on off-exchange-traded forward currency
contracts, should materially decrease the Partnership's credit
risk in the event of MS & Co.'s bankruptcy or insolvency.

Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL

CONDITION AND RESULTS OF OPERATIONS

Liquidity. The Partnership deposits its assets with Morgan
Stanley DW as non-clearing broker, and MS & Co. and MSIL as
clearing brokers in separate futures, forwards, and options
trading accounts established for the Trading Advisor, which assets
are used as margin to engage in trading and may be used as margin
solely for the Partnership's trading. The assets are held in
either non-interest bearing bank accounts or in securities and
instruments permitted by the CFTC for investment of customer
segregated or secured funds. Since the Partnership's sole purpose
is to trade in futures, forwards and options, it is expected that
the Partnership will continue to own such liquid assets for margin
purposes.

The Partnership's investment in futures, forwards, and options
may, from time to time, be illiquid. Most U.S. futures exchanges
limit fluctuations in prices during a single day by regulations
referred to as "daily price fluctuations limits" or "daily
limits". Trades may not be executed at prices beyond the daily
limit. If the price for a particular futures or options contract
has increased or decreased by an amount equal to the daily limit,
positions in that futures or options contract can neither be taken
nor liquidated unless traders are willing to effect trades at or
within the limit. Futures prices have occasionally moved the
daily limit for several consecutive days with little or no
trading. These market conditions could prevent the Partnership
from promptly liquidating its futures or options contracts and
result in restrictions on redemptions.

There is no limitation on daily price moves in trading forward
contracts on foreign currencies. The markets for some world
currencies have low trading volume and are illiquid, which may
prevent the Partnership from trading in potentially profitable
markets or prevent the Partnership from promptly liquidating
unfavorable positions in such markets, subjecting it to
substantial losses. Either of these market conditions could
result in restrictions on redemptions. For the periods covered by
this report, illiquidity has not materially affected the
Partnership's assets.

There are no known material trends, demands, commitments, events
or uncertainties at the present time that will result in, or that
are reasonably likely to result in, the Partnership's liquidity
increasing or decreasing in any material way.

Capital Resources. The Partnership does not have, nor expect to
have, any capital assets. Redemptions, exchanges, and sales of
additional units of limited partnership interest ("Unit(s)") in
the future will affect the amount of funds available for
investment in futures, forwards, and options in subsequent
periods. It is not possible to estimate the amount, and therefore
the impact, of future redemptions of Units.

There are no known material trends, favorable or unfavorable, that
would affect, nor any expected material changes to, the
Partnership's capital resource arrangements at the present time.

Off-Balance Sheet Arrangements and Contractual Obligations. The
Partnership does not have any off-balance sheet arrangements, nor
does it have contractual obligations or commercial commitments to
make future payments that would affect its liquidity or capital
resources.

Results of Operations
General. The Partnership's results depend on the Trading Advisor
and the ability of the Trading Advisor's trading program to take
advantage of price movements in the futures, forwards, and options
markets. The following presents a summary of the Partnership's
operations for the three and six month periods ended June 30, 2004
and 2003, and a general discussion of its trading activities
during each period. It is important to note, however, that the
Trading Advisor trades in various markets at different times and
that prior activity in a particular market does not mean that such
market will be actively traded by the Trading Advisor or will be
profitable in the future. Consequently, the results of operations
of the Partnership are difficult to discuss other than in the
context of the Trading Advisor's trading activities on behalf of
the Partnership during the period in question. Past performance
is no guarantee of future results.

The Partnership's results of operations set forth in the
financial statements on pages 2 through 12 of this report were
prepared in accordance with accounting principles generally
accepted in the United States of America, which require the use
of certain accounting policies that affect the amounts reported
in these financial statements, including the following: The
contracts the Partnership trades are accounted for on a trade-
date basis and marked to market on a daily basis. The difference
between their cost and market value is recorded on the Statements
of Operations as "Net change in unrealized trading profit/loss"
for open (unrealized) contracts, and recorded as "Realized
trading profit/loss" when open positions are closed out, and the
sum of these amounts constitutes the Partnership's trading
results. The market value of a futures contract is the
settlement price on the exchange on which that futures contract
is traded on a particular day. The value of foreign currency
forward contracts is based on the spot rate as of the close of
business, New York City time, on a given day. Interest income
revenue, as well as management fees, incentive fees and brokerage
fees expenses of the Partnership are recorded on an accrual
basis.

Demeter believes that, based on the nature of the operations of
the Partnership, no assumptions relating to the application of
critical accounting policies other than those presently
used could reasonably affect reported amounts.

For the Quarter and Six Months Ended June 30, 2004
The Partnership recorded losses net of interest income totaling
$16,865,882 and expenses totaling $4,138,287, resulting in a net
loss of $21,004,169 for the quarter ended June 30, 2004. The
Partnership's net asset value per Unit decreased from $12.73
at March 31, 2004 to $11.32 at June 30, 2004.

The most significant trading losses of approximately 4.5% were
generated in the global interest rate futures markets primarily
during April from long European and U.S. interest rate futures
positions as prices tumbled following the release of stronger
than expected U.S. jobs data. Additional losses were incurred
during June from short positions in European interest rate
futures as prices reversed higher on weaker than expected U.S.
economic reports and the likelihood that the U.S. Federal Reserve
would move slowly in raising interest rates. In the currency
markets, losses of approximately 3.8% were experienced from long
positions in the Australian dollar versus the U.S. dollar during
April as the U.S. dollar benefited from rising interest rates and
the perception that the U.S. economy was experiencing a
sustainable recovery. Additional currency losses were
experienced during April from long positions in the Canadian
dollar against the U.S. dollar as the value of the Canadian
dollar moved lower due to weakness in gold prices.
Further losses were experienced during June from short positions
in the Canadian dollar as its value reversed higher on
expectations that the Bank of Canada would join the U.S. Federal
Reserve in tightening interest rates. Smaller currency losses
were incurred throughout the quarter from both long and short
positions in the Japanese yen relative to the U.S dollar as the
value of the yen experienced significant short-term price
volatility. Within the global stock index markets, losses of
approximately 1.7% were incurred during April and May from long
positions in European equity index futures as prices drifted
lower amid the continuing difficulties in Iraq, fears of global
terrorism and concerns of higher interest rates. A portion of
the Partnership's overall losses was offset by gains of
approximately 0.6% in the energy markets, primarily during April
and May from long futures positions in crude oil as prices
increased sharply amid fears of potential terrorist attacks
against Saudi Arabian oil facilities and disruptions in Iraqi oil
production and distribution.

The Partnership recorded revenues including interest income
totaling $7,648,746 and expenses totaling $11,309,637, resulting
in a net loss of $3,660,891 for the six months ended June 30,
2004. The Partnership's net asset value per Unit increased from
$11.14 at December 31, 2003 to $11.32 at June 30, 2004. The net
asset value per Unit increased in spite of the Partnership's net
loss for the period due to an influx of subscriptions that caused
per Unit net losses in the second quarter to be less than
per Unit net gains in the first quarter.

The most significant trading gains of approximately 7.1% were
generated in the global interest rate markets, primarily during
February and March, from long positions in European and U.S.
interest rate futures as prices moved higher on speculation about
European and U.S. interest rate policy, uncertainty in global
equity markets, and safe-haven buying following a major terrorist
attack in Madrid. Additional gains of approximately 2.5% were
recorded in the currency markets from long positions in the
British pound versus the U.S. dollar, primarily during January and
February, as the pound increased sharply versus the dollar due to
U.S. current-account deficits, concerns for potential terrorist
attacks and looming expectations for a further increase of U.K.
interest rates by the Bank of England. Additional currency gains
were recorded during January and February from short positions in
the Swiss franc relative to the U.S. dollar as the value of the
franc moved lower due to conflicting economic data out of
Switzerland. Smaller gains were incurred primarily during January
and February from long positions in the New Zealand dollar versus
the U.S. dollar as the value of the New Zealand dollar
strengthened due to significant interest rate differentials
between the two countries and higher gold prices. Within the
energy markets, gains of approximately 2.1% were generated during
February, April and May from long positions in crude oil futures
as prices trended higher amid fears of potential terrorist
attacks against Saudi Arabian oil facilities and disruptions in
Iraqi oil production, falling inventory levels, and uncertainty
regarding production levels from OPEC. A portion of the
Partnership's overall gains was offset by losses of approximately
1.9% in the global stock index futures markets during March from
long European stock index futures positions as equity prices
dropped amid terror attacks in Madrid, worse than expected German
industrial production and weak business confidence data. Further
losses from long positions were incurred during May as European
equity prices were negatively impacted by geopolitical concerns
relating to Iraq, surging energy prices, and weaker than expected
economic data.

For the Quarter and Six Months Ended June 30, 2003
The Partnership recorded revenues including interest income
totaling $2,760,196 and expenses totaling $1,164,137, resulting in
net income of $1,596,059 for the quarter ended June 30, 2003. The
Partnership's net asset value per Unit increased from $10.39 at
March 31, 2003 to $10.79 at June 30, 2003.

The most significant trading gains of approximately 5.9% in the
currency markets stemmed from long positions in the euro versus
the U.S. dollar as concerns regarding the U.S. economic recovery
resurfaced and resulted in the value of the dollar declining to an
all time low versus the euro during April. Additional gains
resulted from long positions in the Canadian dollar and the
Australian dollar versus the U.S. dollar as the value of these
currencies strengthened amid significant interest rate
differentials between the respective countries and the U.S. Gains
of approximately 2.0% were recorded primarily during May in the
global interest rate markets from long positions in U.S. interest
rate futures as prices trended higher during May amid speculation
of an interest rate cut by the U.S. Federal Reserve and lingering
doubts concerning a global economic recovery. A portion of the
Partnership's overall gains for the quarter was offset by losses
of approximately 0.8% in the global stock index markets from short
positions in European stock index futures as global equity prices
rallied in response to positive earnings announcements and the
conclusion of the war in Iraq. Losses of approximately 0.7% in
the energy markets resulted from short futures positions in crude
oil and its related products during May as prices moved higher
amid supply concerns and renewed fears concerning security at
Middle Eastern refining facilities. During June, losses were
recorded from long positions in natural gas futures as prices
reversed sharply lower following news of larger than expected U.S.
reserves.

The Partnership recorded revenues including interest income
totaling $5,306,051 and expenses totaling $2,440,684, resulting in
net income of $2,865,367 for the six months ended June 30, 2003.
The Partnership's net asset value per Unit increased from $9.58 at
December 31, 2002 to $10.79 at June 30, 2003.

The most significant trading gains of approximately 13.1%
were recorded in the currency markets from long positions in the
euro as its value strengthened to an all time high versus the U.S.
dollar during January amid renewed fears of a military conflict
with Iraq, increased tensions with North Korea, and weak U.S.
economic data. Additional gains were provided by short positions
in the British pound versus the U.S. dollar as the value of the
pound decreased during February due to weak economic data out of
the U.K. and an interest rate cut by the Bank of England.
Additional gains during February and April were recorded from long
positions in the Canadian and Australian dollar versus the U.S.
dollar as the value of these currencies increased on the heels of
higher commodity prices and significant interest rate
differentials between the respective countries and the U.S.
Additional gains of approximately 4.1% in the energy markets were
provided by long positions in natural gas futures as prices
rallied during January and February in response to prolonged
frigid temperatures in the northeastern and midwestern United
States. Additional gains resulted from long positions in crude
oil futures as prices trended higher amid the looming threat of
military action against Iraq and an overall decline in
inventories. In the global interest rate markets, gains of
approximately 3.8% were generated from long positions in U.S. and
European interest rate futures during January and February as
prices moved higher amid investor demand for fixed income
investments due to uncertainty in global equity markets. During
June, long positions in U.S. and European interest rate futures
experienced further gains as prices continued to trend
higher amid speculation of an interest rate cut by the U.S.
Federal Reserve and lingering doubts concerning a global economic
recovery. A portion of the Partnership's overall gains during the
first half of the year was offset by losses of approximately 0.6%
in the global stock index markets recorded from short positions in
European stock index futures as global equity prices rallied
during April in response to positive earnings announcements and
the conclusion of the war in Iraq. Short positions in Asian stock
index futures incurred losses during May as prices reversed higher
amid heavy buying by Japanese pension funds and renewed hopes for
a government stimulus package. Losses of approximately 0.6% were
incurred by long positions in gold futures as prices declined in
response to the rise of the U.S. dollar.
Item 3.QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET
RISK

Introduction
The Partnership is a commodity pool engaged primarily in the
speculative trading of futures, forwards, and options. The
market-sensitive instruments held by the Partnership are acquired
for speculative trading purposes only and, as a result, all or
substantially all of the Partnership's assets are at risk of
trading loss. Unlike an operating company, the risk of market-
sensitive instruments is inherent to the primary business
activity of the Partnership.

The futures, forwards, and options traded by the Partnership
involve varying degrees of related market risk. Market risk is
often dependent upon changes in the level or volatility of
interest rates, exchange rates, and prices of financial
instruments and commodities, factors that result in frequent
changes in the fair value of the Partnership's open positions,
and consequently in its earnings, whether realized or unrealized,
and cash flow. Gains and losses on open positions of exchange-
traded futures, forwards, and options are settled daily through
variation margin. Gains/losses on off-exchange-traded forward
currency contracts are settled at the termination of the contract
or more frequently, as agreed upon with each counterparty.

The Partnership's total market risk may increase or
decrease as it is influenced by a wide variety of factors,
including, but not limited to, the diversification among the
Partnership's open positions, the volatility present within the
markets, and the liquidity of the markets.

The Partnership's past performance is no guarantee of its future
results. Any attempt to numerically quantify the Partnership's
market risk is limited by the uncertainty of its speculative
trading. The Partnership's speculative trading may cause future
losses and volatility (i.e., "risk of ruin") that far exceed the
Partnership's experience to date or any reasonable expectations
based upon historical changes in market value.

Limited partners will not be liable for losses exceeding the
current net asset value of their investment.

Quantifying the Partnership's Trading Value at Risk
The following quantitative disclosures regarding the Partnership's
market risk exposures contain "forward-looking statements" within
the meaning of the safe harbor from civil liability provided for
such statements by the Private Securities Litigation Reform Act of
1995 (set forth in Section 27A of the Securities Act of 1933 and
Section 21E of the Securities Exchange Act of 1934). All
quantitative disclosures in this section are deemed to be forward-
looking statements for purposes of the safe harbor, except for
statements of historical fact.

The Partnership accounts for open positions on the basis of mark
to market accounting principles. Any loss in the market value of
the Partnership's open positions is directly reflected in the
Partnership's earnings and cash flow.

The Partnership's risk exposure in the market sectors traded by
the Trading Advisor is estimated below in terms of Value at Risk
("VaR"). The Partnership estimates VaR using a model based upon
historical simulation (with a confidence level of 99%) which
involves constructing a distribution of hypothetical daily
changes in the value of a trading portfolio. The VaR model takes
into account linear exposures to risks including equity and
commodity prices, interest rates, foreign exchange rates, and
correlation among these variables. The hypothetical changes in
portfolio value are based on daily percentage changes observed in
key market indices or other market factors ("market risk
factors") to which the portfolio is sensitive. The one-day 99%
confidence level of the Partnership's VaR corresponds to the
negative change in portfolio value that, based on observed market
risk factors, would have been exceeded once in 100 trading days,
or one day in 100. VaR typically does not represent the worst
case outcome. Demeter uses approximately four years of daily
market data (1,000 observations) and revalues its portfolio
(using delta-gamma approximations) for each of the historical
market moves that occurred over this time period. This generates
a probability distribution of daily "simulated profit and
loss" outcomes. The VaR is the appropriate percentile of this
distribution. For example, the 99% one-day VaR would represent
the 10th worst outcome from Demeter's simulated profit and loss
series.

The Partnership's VaR computations are based on the risk
representation of the underlying benchmark for each instrument or
contract and do not distinguish between exchange and non-exchange
dealer-based instruments. They are also not based on exchange
and/or dealer-based maintenance margin requirements.

VaR models, including the Partnership's, are continually evolving
as trading portfolios become more diverse and modeling techniques
and systems capabilities improve. Please note that the VaR model
is used to numerically quantify market risk for historic
reporting purposes only and is not utilized by either Demeter or
the Trading Advisor in their daily risk management activities.
Please further note that VaR as described above may not be
comparable to similarly titled measures used by other entities.

The Partnership's Value at Risk in Different Market Sectors
The following table indicates the VaR associated with the
Partnership's open positions as a percentage of total net assets
by primary market risk category at June 30, 2004 and 2003. At
June 30, 2004 and 2003, the Partnership's total
capitalization was approximately $206 million and $64 million,
respectively.
Primary Market June 30, 2004 June 30, 2003
Risk Category Value at Risk Value at Risk

Currency (0.92)% (1.20)%

Interest Rate (0.54) (1.26)

Equity (0.52) (0.78)

Commodity (0.11) (0.21)

Aggregate Value at Risk (1.19)% (1.90)%

The VaR for a market category represents the one-day downside risk
for the aggregate exposures associated with this market category.
The Aggregate Value at Risk listed above represents the VaR of the
Partnership's open positions across all the market categories, and
is less than the sum of the VaRs for all such market categories
due to the diversification benefit across asset classes.

Because the business of the Partnership is the speculative
trading of futures, forwards, and options, the composition of its
trading portfolio can change significantly over any given time
period, or even within a single trading day, which could
positively or negatively materially impact market risk as
measured by VaR.

The table below supplements the quarter-end VaR set forth above
by presenting the Partnership's high, low and average VaR, as a
percentage of total net assets for the four quarter-end
reporting periods from July 1, 2003 through June 30, 2004.

Primary Market Risk Category High Low Average
Currency (1.75)% (0.92)% (1.30)%
Interest Rate (2.04) (0.22) (1.17)
Equity (1.23) (0.23) (0.78)
Commodity (0.73) (0.11) (0.48)
Aggregate Value at Risk (2.78)% (1.19)% (2.02)%

Limitations on Value at Risk as an Assessment of Market Risk
The face value of the market sector instruments held by the
Partnership is typically many times the applicable margin
requirements. Margin requirements generally range between 2% and
15% of contract face value. Additionally, the use of leverage
causes the face value of the market sector instruments held by the
Partnership to typically be many times the total capitalization of
the Partnership. The value of the Partnership's open positions
thus creates a "risk of ruin" not typically found in other
investments. The relative size of the positions held may cause
the Partnership to incur losses greatly in excess of VaR within a
short period of time, given the effects of the leverage employed
and market volatility. The VaR tables above, as well as the past
performance of the Partnership, give no indication of such "risk
of ruin". In addition, VaR risk measures should be viewed in light
of the methodology's limitations, which include the following:

? past changes in market risk factors will not always result in
accurate predictions of the distributions and correlations of
future market movements;
? changes in portfolio value caused by market movements may
differ from those of the VaR model;
? VaR results reflect past market fluctuations applied to current
trading positions while future risk depends on future
positions;
? VaR using a one-day time horizon does not fully capture the
market risk of positions that cannot be liquidated or hedged
within one day; and
? the historical market risk factor data used for VaR estimation
may provide only limited insight into losses that could be
incurred under certain unusual market movements.

The VaR tables provided present the results of the Partnership's
VaR for each of the Partnership's market risk exposures and on an
aggregate basis at June 30, 2004 and 2003, and for the four
quarter-end reporting periods from July 1, 2003 through June 30,
2004. VaR is not necessarily representative of the Partnership's
historic risk, nor should it be used to predict the Partnership's
future financial performance or its ability to manage or monitor
risk. There can be no assurance that the Partnership's actual
losses on a particular day will not exceed the VaR amounts
indicated above or that such losses will not occur more than once
in 100 trading days.

Non-Trading Risk
The Partnership has non-trading market risk on its foreign cash
balances not needed for margin. These balances and any market
risk they may represent are immaterial.

The Partnership also maintains a substantial portion
(approximately 89% as of June 30, 2004) of its available assets in
cash at Morgan Stanley DW. A decline in short-term interest rates
would result in a decline in the Partnership's cash management
income. This cash flow risk is not considered to be material.

Materiality, as used throughout this section, is based on an
assessment of reasonably possible market movements and any
associated potential losses, taking into account the leverage,
optionality and multiplier features of the Partnership's market-
sensitive instruments, in relation to the Partnership's net
assets.

Qualitative Disclosures Regarding Primary Trading Risk Exposures
The following qualitative disclosures regarding the Partnership's
market risk exposures - except for (A) those disclosures that are
statements of historical fact and (B) the descriptions of how the
Partnership manages its primary market risk exposures - constitute
forward-looking statements within the meaning of Section
27A of the Securities Act and Section 21E of the Securities
Exchange Act. The Partnership's primary market risk exposures, as
well as the strategies used and to be used by Demeter and the
Trading Advisor for managing such exposures, are subject to
numerous uncertainties, contingencies and risks, any one of which
could cause the actual results of the Partnership's risk controls
to differ materially from the objectives of such strategies.
Government interventions, defaults and expropriations, illiquid
markets, the emergence of dominant fundamental factors, political
upheavals, changes in historical price relationships, an influx of
new market participants, increased regulation and many other
factors could result in material losses, as well as in material
changes to the risk exposures and the risk management strategies
of the Partnership. Investors must be prepared to lose all or
substantially all of their investment in the Partnership.

The following were the primary trading risk exposures of the
Partnership at June 30, 2004, by market sector. It may be
anticipated, however, that these market exposures will vary
materially over time.

Currency. The primary market exposure of the Partnership at June
30, 2004 was to the currency sector. The Partnership's currency
exposure is to exchange rate fluctuations, primarily fluctuations
which disrupt the historical pricing relationships between
different currencies and currency pairs. Interest rate changes,
as well as political and general economic conditions
influence these fluctuations. At June 30, 2004, the
Partnership's major exposure was to outright U.S. dollar
positions. Outright positions consist of the U.S. dollar vs.
other currencies. These other currencies include major and minor
currencies. Demeter does not anticipate that the risk profile of
the Partnership's currency sector will change significantly in
the future.

Interest Rate. The second largest market exposure of the
Partnership at June 30, 2004 was to the global interest rate
sector. Exposure was primarily spread across the European, U.S.
and Japanese interest rate sectors. Interest rate movements
directly affect the price of the sovereign bond futures positions
held by the Partnership and indirectly affect the value of its
stock index and currency positions. Interest rate movements in
one country, as well as relative interest rate movements between
countries, materially impact the Partnership's profitability. The
Partnership's interest rate exposure is generally to interest
rate fluctuations in the U.S. and the other G-7 countries. The
G-7 countries consist of France, the U.S., Britain, Germany,
Japan, Italy, and Canada. Demeter anticipates that the G-7
countries interest rates will remain the primary interest rate
exposure of the Partnership for the foreseeable future. The
speculative futures positions held by the Partnership may range
from short to long-term instruments. Consequently, changes in
short, medium, or long-term interest rates may have an
effect on the Partnership.

Equity. The third largest market exposure of the Partnership at
June 30, 2004 was to equity price risk in the G-7 countries. The
stock index futures traded by the Partnership are by law limited
to futures on broadly-based indices. At June 30, 2004, the
Partnership's primary exposures were to the Euro Stoxx 50
(Europe), S&P 500 (U.S.), and NASDAQ (U.S.) stock indices. The
Partnership is exposed to the risk of adverse price trends or
static markets in the U.S., European and Japanese stock indices.
Static markets would not cause major market changes, but would
make it difficult for the Partnership to avoid trendless price
movements, resulting in numerous small losses.

Commodity.
Energy. At June 30, 2004, the Partnership's energy exposure
was primarily to futures contracts in heating oil and
natural gas. Price movements in these markets result from
geopolitical developments, particularly in the Middle East,
as well as weather patterns and other economic fundamentals.
Significant profits and losses, which have been experienced
in the past, are expected to continue to be experienced in
the future. Natural gas has exhibited volatility in prices
resulting from weather pattern and supply and demand factors
and will likely continue in this choppy pattern.

Metals. The Partnership's metals exposure at June
30, 2004 was to fluctuations in the price of base metals,
such as nickel, zinc, and copper. Economic forces, supply
and demand inequalities, geopolitical factors and market
expectations influence price movements in these markets.
The Trading Advisor, from time to time, takes positions when
market opportunities develop, and Demeter anticipates that
the Partnership will continue to do so.

Qualitative Disclosures Regarding Non-Trading Risk Exposure
The following was the only non-trading risk exposure of the
Partnership at June 30, 2004:

Foreign Currency Balances. The Partnership's primary foreign
currency balances at June 30, 2004 were in euros and British
pounds. The Partnership controls the non-trading risk of
foreign currency balances by regularly converting them back
into U.S. dollars upon liquidation of their respective
positions.

Qualitative Disclosures Regarding Means of Managing Risk Exposure
The Partnership and the Trading Advisor, separately, attempt to
manage the risk of the Partnership's open positions in essentially
the same manner in all market categories traded. Demeter attempts
to manage market exposure by diversifying the Partnership's assets
among different market sectors and trading approaches, and by
monitoring the performance of the Trading Advisor daily. In
addition, the Trading Advisor establishes diversification
guidelines, often set in terms of the maximum margin to be
committed to positions in any one market sector or market-
sensitive instrument.

Demeter monitors and controls the risk of the Partnership's non-
trading instrument, cash. Cash is the only Partnership
investment directed by Demeter, rather than the Trading Advisor.

Item 4. CONTROLS AND PROCEDURES
(a) As of the end of the period covered by this quarterly
report, the President and Chief Financial Officer of
Demeter, the general partner of the Partnership, have
evaluated the effectiveness of the Partnership's
disclosure controls and procedures (as defined in Rules
13a-15(e) and 15d-15(e) of the Exchange Act), and have
judged such controls and procedures to be effective.

(b) There have been no significant changes during the
period covered by this quarterly report in the
Partnership's internal controls or in other factors
that could significantly affect these controls
subsequent to the date of their evaluation.

PART II. OTHER INFORMATION

Item 2. CHANGES IN SECURITIES AND USE OF PROCEEDS
The Partnership initially registered 3,000,000 Units pursuant to a
Registration Statement on Form S-1, which became effective on July
29, 2002 (SEC File Number 333-85078).

The Partnership registered an additional 18,000,000 Units pursuant
to another Registration Statement on Form S-1, which became
effective on February 26, 2003 (SEC File Number 333-103171).

The Partnership registered an additional 34,000,000 Units pursuant
to another Registration Statement on Form S-1, which became
effective on April 28, 2004 (SEC File Number 333-113878).

The managing underwriter for the Partnership is Morgan Stanley DW.

Units are continuously sold at monthly closings at a purchase
price equal to 100% of the net asset value per Unit as of the
close of business on the last day of each month.

Through June 30, 2004, 18,831,411.266 Units were sold, leaving
36,168,588.734 Units unsold. The aggregate price of the Units
sold through June 30, 2004 was $209,465,978.

Since no expenses are chargeable against the proceeds, 100% of the
proceeds of the offering have been applied to the working capital
of the Partnership for use in accordance with the "Use of
Proceeds" section of the prospectus included as part of the above
referenced Registration Statements.

Item 5. OTHER INFORMATION
Management. Effective June 21, 2004, the following changes have
been made to the Board of Directors and Officers of Demeter:

Mr. Jeffrey D. Hahn resigned the position of Chief Financial
Officer and Director of Demeter.

Mr. Todd Taylor, age 41, is a Director of Demeter. Mr. Taylor
began his career with Morgan Stanley in June 1987 as a Financial
Advisor in the Dallas office. In 1995, he joined the Management
Training Program in New York and was appointed Branch Manager in
St. Louis in 1997. Three years later, in 2000, Mr. Taylor was
appointed to a newly created position, Director of Individual
Investor Group ("IIG") Learning and Development, before becoming
the Director of IIG Strategy in 2002. Most recently, Mr. Taylor
has taken on a new role as the High Net Worth Segment Director.
Currently a member of the firm's E-Learning Council, Mr. Taylor
is also a current member of the Securities Industry/Regulatory
Council on Continuing Education. Mr. Taylor graduated from Texas
Tech University with a B.B.A. in Finance.

Mr. William D. Seugling, age 34, will become a Director of
Demeter once he has registered with the National Futures
Association ("NFA") as a principal, which registration is
currently pending. Mr. Seugling is an Executive Director at
Morgan Stanley and currently serves as Director of Client
Solutions for US Private Wealth Management. Mr. Seugling joined
Morgan Stanley in June 1993 as an Associate in Equity Structured
Products having previously worked in research and consulting for
Greenwich Associates from October 1991 to June 1993. Since 1994,
he has focused broadly on analysis and solutions for wealthy
individuals and families culminating in his current role within
the division. He was named Vice President in 1996 and an
Executive Director in 1999. Mr. Seugling graduated cum laude
from Bucknell University with a B.S. in Management and a
concentration in Chemistry.

Mr. Kevin Perry, age 35, is the Chief Financial Officer of
Demeter. His registration with the NFA as a principal is
currently pending. He currently serves as an Executive Director
and Controller of Client Solutions at Morgan Stanley. Mr. Perry
joined Morgan Stanley in October 2000 and is also Chief Financial
Officer of Morgan Stanley Trust National Association, Van Kampen
Funds Inc. and Morgan Stanley Distribution, Inc. Prior to
joining Morgan Stanley, Mr. Perry worked as an auditor and
consultant in the financial services practice of Ernst & Young
from October 1991 to October 2000. Mr. Perry received a B.S.
degree in Accounting from the University of Notre Dame in
1991 and is a Certified Public Accountant.

Item 6. EXHIBITS AND REPORTS ON FORM 8-K
(A) Exhibits

3.01 Form of Amended and Restated Limited Partnership
Agreement, by and among Demeter Management Corporation
and the Limited Partners, dated March 26, 2002, is
incorporated by reference to Exhibit A of the
Partnership's Prospectus, dated April 28, 2004, filed
with the Securities and Exchange Commission pursuant to
Rule 424(b)(3) under the Securities Act of 1933, as
amended, on May 4, 2004.
3.02 Certificate of Limited Partnership of the Partnership,
dated as of March 26, 2002, is incorporated by reference
to Exhibit 3.02 of the Partnership's Registration
Statement on Form S-1 (File No. 333-85078) filed with
the Securities and Exchange Commission on March 28,
2002.
10.01 Management Agreement, among the Partnership, Demeter
Management Corporation and Campbell & Company, Inc.,
dated September 30, 2002, is incorporated by reference to
Exhibit 10.01 of the Partnership Registration Statement
on Form S-1 (File No. 333-103171) filed with the
Securities and Exchange Commission on February 13, 2003.
10.02 Form of Subscription and Exchange Agreement and Power of
Attorney to be executed by purchasers of Units is
incorporated by reference to Exhibit B of the
Partnership's Prospectus, dated April 28, 2004, filed
with the Securities and Exchange Commission pursuant to
Rule 424(b)(3) under the Securities Act of 1933, as
amended, on May 4, 2004.
10.03 Form of Subscription Agreement Update Form to be executed
by purchasers of Units is incorporated by reference to
Exhibit C of the Partnership's Prospectus, dated April
28, 2004, filed with the Securities and Exchange
Commission pursuant to Rule 424(b)(3) under the
Securities Act of 1933, as amended, on May 4, 2004.

10.04 Amended and Restated Escrow Agreement among the
Partnership, Morgan Stanley Charter Graham L.P., Morgan
Stanley Charter Millburn L.P., Morgan Stanley Charter
Welton L.P., Morgan Stanley Charter MSFCM L.P., Morgan
Stanley DW Inc., and JP Morgan Chase Bank, as escrow
agent, dated August 31, 2002, is incorporated by
reference to Exhibit 10.04 of the Partnership's
Registration Statement on Form S-1 (File No. 333-103171)
filed with the Securities and Exchange Commission on
February 13, 2003.
10.05 Customer Agreement between the Partnership and Morgan
Stanley DW Inc., dated September 30, 2002, is
incorporated by reference to Exhibit 10.05 of the
Partnership's Registration Statement on Form S-1 (File
No. 333-103171) filed with the Securities and Exchange
Commission on February 13, 2003.
10.06 Customer Agreement, among the Partnership, Morgan Stanley
& Co. Incorporated, and Morgan Stanley DW Inc., dated
September 30, 2002, is incorporated by reference to
Exhibit 10.06 of the Partnership's Registration Statement
on Form S-1 (File No. 333-103171) filed with the
Securities and Exchange Commission on February 13, 2003.
10.07 Customer Agreement, between the Partnership and Morgan
Stanley & Co. International Limited, dated September 30,
2002, is incorporated by reference to Exhibit 10.07 of
the Partnership's Registration Statement on Form S-1
(File No. 333-103171) filed with the Securities and
Exchange Commission on February 13, 2003.
10.08 Foreign Exchange and Options Master Agreement, between
the Partnership and Morgan Stanley & Co. Incorporated,
dated August 31, 2002, is incorporated by reference to
Exhibit 10.08 of the Partnership's Quarterly Report on
Form 10-Q (File No. 0-50064) filed with the Securities
and Exchange Commission on May 14, 2003.
10.09 Securities Account Control Agreement, among the
Partnership, Morgan Stanley & Co. Incorporated, and
Morgan Stanley DW Inc., dated September 30, 2002, is
incorporated by reference to Exhibit 10.09 of the
Partnership's Registration Statement on Form S-1 (File
No. 333-103171) filed with the Securities and Exchange
Commission on February 13, 2003.
31.01 Certification of President of Demeter Management
Corporation, the general partner of the Partnership,
pursuant to rules 13a-15(e) and 15d-15(e), as adopted
pursuant to Section 302 of the Sarbanes-Oxley Act
of 2002.
31.02 Certification of Chief Financial Officer of Demeter
Management Corporation, the general partner of the
Partnership, pursuant to rules 13a-15(e) and 15d-15(e),
as adopted pursuant to Section 302 of the Sarbanes-Oxley
Act of 2002.
32.01 Certification of President of Demeter Management
Corporation, the general partner of the Partnership,
pursuant to 18 U.S.C. Section 1350, as adopted pursuant
to Section 906 of the Sarbanes-Oxley Act of 2002.
32.02 Certification of Chief Financial Officer of Demeter
Management Corporation, the general partner of the
Partnership, pursuant to 18 U.S.C. Section 1350, as
adopted pursuant to Section 906 of the Sarbanes-Oxley Act
of 2002.

(B) Reports on Form 8-K - None.

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of
1934, the Registrant has duly caused this report to be signed on
its behalf by the undersigned, thereunto duly authorized.

Morgan Stanley Charter Campbell L.P.
(Registrant)

By: Demeter Management Corporation
(General Partner)

August 16, 2004 By:/s/ Kevin Perry
Kevin Perry
Chief Financial Officer

The General Partner which signed the above is the only party
authorized to act for the Registrant. The Registrant has no
principal executive officer, principal financial officer,
controller, or principal accounting officer and has no Board of
Directors.

MORGAN STANLEY CHARTER CAMPBELL L.P.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)

MORGAN STANLEY CHARTER CAMPBELL L.P.
NOTES TO FINANCIAL STATEMENTS (CONCLUDED)