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

FORM 10-Q

[X] QUARTERNY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 2007 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 0-25603

MORGAN STANLEY CHARTER GRAHAM L.P.

(Exact name of registrant as specified in its charter)

Delaware 13-4018068
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)

Demeter Management Corporation
330 Madison Avenue, 8th Floor
New York, NY 10017
(Address of principal executive offices) (Zip Code)

Registrant?s telephone number, including area code (212) 905-2700

(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 a large accelerated
filer, an accelerated filer, or a non-accelerated filer. See definition
of ?accelerated filer and large accelerated filer? in Rule 12b-2 of the
Exchange Act. (Check one):

Large accelerated filer___Accelerated filer____Non-accelerated filer X

Indicate by check mark whether the registrant is a shell company
(as defined in Rule 12b-2 of the Exchange Act). Yes___ No X

<page> <table> MORGAN STANLEY CHARTER GRAHAM L.P.

INDEX TO QUARTERLY REPORT ON FORM 10-Q

March 31, 2007

PART I. FINANCIAL INFORMATION
<s> <c>
Item 1. Financial Statements

Statements of Financial Condition as of March 31, 2007
(Unaudited) and December 31, 2006..........................2

Statements of Operations for the Quarters Ended
March 31, 2007 and 2006 (Unaudited)........................3

Statements of Changes in Partners? Capital for the
Quarters Ended March 31, 2007 and 2006 (Unaudited).........4

Statements of Cash Flows for the Quarters Ended
March 31, 2007 and 2006 (Unaudited)........................5

Notes to Financial Statements (Unaudited)...............6-13

Item 2. Management?s Discussion and Analysis of
Financial Condition and Results of Operations.......14-23

Item 3. Quantitative and Qualitative Disclosures about
Market Risk.........................................23-37

Item 4. Controls and Procedures.............................37-38

Item 4T. Controls and Procedures................................38

PART II. OTHER INFORMATION

Item 1A. Risk Factors...........................................39

Item 2. Unregistered Sales of Equity Securities and
Use of Proceeds.....................................39-40

Item 6. Exhibits...............................................40
</table>

<page> <table> PART I. FINANCIAL INFORMATION

Item 1. Financial Statements

MORGAN STANLEY CHARTER GRAHAM L.P.
STATEMENTS OF FINANCIAL CONDITION
<caption>
March 31, December 31,
2007 2006
$ $
(Unaudited)
ASSETS
<s> <c> <c>
Equity in futures interests trading accounts:
Unrestricted cash 354,966,321 362,441,363
Restricted cash 10,773,609 54,560,197

Total cash 365,739,930 417,001,560

Net unrealized gain on open contracts (MS&Co.) 4,756,434 12,852,858
Net unrealized loss on open contracts (MSIL) (766,711) (314,794)

Total net unrealized gain on open contracts 3,989,723 12,538,064

Total Trading Equity 369,729,653 429,539,624

Subscriptions receivable 3,768,812 3,317,475
Interest receivable (Morgan Stanley DW) 1,777,001 1,824,393

Total Assets 375,275,466 434,681,492

LIABILITIES AND PARTNERS? CAPITAL

Liabilities

Redemptions payable 8,984,369 11,873,932
Accrued brokerage fees (Morgan Stanley DW) 1,910,035 2,123,827
Accrued management fees 636,679 707,942

Total Liabilities 11,531,083 14,705,701

Partners? Capital

Limited Partners (20,667,407.656 and
21,346,676.377 Units, respectively) 359,722,565 415,478,418
General Partner (231,068.501 Units) 4,021,818 4,497,373

Total Partners? Capital 363,744,383 419,975,791

Total Liabilities and Partners? Capital 375,275,466 434,681,492
NET ASSET VALUE PER UNIT 17.41 19.46
<fn>

The accompanying notes are an integral part
of these financial statements.
</table>

<page> <table> MORGAN STANLEY CHARTER GRAHAM L.P.
STATEMENTS OF OPERATIONS
(Unaudited)

For the Quarters Ended March 31,

2007 2006
$ $
<s> <c> <c>
INVESTMENT INCOME
Interest income (Morgan Stanley DW) 4,966,259 4,166,796

EXPENSES
Brokerage fees (Morgan Stanley DW) 6,054,126 6,286,876
Management fees 2,018,043 2,095,626

Total Expenses 8,072,169 8,382,502

NET INVESTMENT LOSS (3,105,910) (4,215,706)

TRADING RESULTS
Trading profit (loss):
Realized (32,216,940) 10,084,814
Net change in unrealized (8,548,341) 8,517,199

Total Trading Results (40,765,281) 18,602,013

NET INCOME (LOSS) (43,871,191) 14,386,307

NET INCOME (LOSS) ALLOCATION

Limited Partners (43,395,636) 14,229,397
General Partner (475,555) 156,910

NET INCOME (LOSS) PER UNIT

Limited Partners (2.05) 0.64
General Partner (2.05) 0.64

<fn>

The accompanying notes are an integral part
of these financial statements.

</table>
<page> <table> MORGAN STANLEY CHARTER GRAHAM L.P.
STATEMENTS OF CHANGES IN PARTNERS? CAPITAL
For the Quarters Ended March 31, 2007 and 2006
(Unaudited)

Units of
Partnership Limited General
Interest Partners Partner Total
$ $ $

<s> <c> <c> <c> <c>
Partners? Capital,
December 31, 2005 22,656,744.737 416,811,790 4,509,689 421,321,479

Offering of Units 1,223,196.253 23,176,630 ? 23,176,630

Net Income ? 14,229,397 156,910 14,386,307

Redemptions (1,875,348.396) (35,452,820) ? (35,452,820)

Partners? Capital,
March 31, 2006 22,004,592.594 418,764,997 4,666,599 423,431,596

Partners? Capital,
December 31, 2006 21,577,744.878 415,478,418 4,497,373 419,975,791

Offering of Units 760,036.983 13,862,819 ? 13,862,819

Net Loss ? (43,395,636) (475,555) (43,871,191)

Redemptions (1,439,305.704) (26,223,036) ? (26,223,036)

Partners? Capital,
March 31, 2007 20,898,476.157 359,722,565 4,021,818 363,744,383

<fn>

The accompanying notes are an integral part
of these financial statements.
</table>

<page> <table> MORGAN STANLEY CHARTER GRAHAM L.P.
STATEMENTS OF CASH FLOWS
(Unaudited)

<caption>
For the Quarters Ended March 31,

2007 2006
$ $

CASH FLOWS FROM OPERATING ACTIVITIES
<s> <c> <c>
Net income (loss) (43,871,191) 14,386,307
Noncash item included in net income (loss):
Net change in unrealized 8,548,341 (8,517,199)

(Increase) decrease in operating assets:
Restricted cash 43,786,588 (45,165,700)
Interest receivable (Morgan Stanley DW) 47,392 (187,947)

Decrease in operating liabilities:
Accrued brokerage fees (Morgan Stanley DW) (213,792) (128,697)
Accrued management fees (71,263) (42,899)

Net cash provided by (used for) operating activities 8,226,075 (39,656,135)

CASH FLOWS FROM FINANCING ACTIVITIES

Cash received from offering of Units 13,411,482 23,366,505
Cash paid for redemptions of Units (29,112,599) (40,580,741)

Net cash used for financing activities (15,701,117) (17,214,236)

Net decrease in unrestricted cash (7,475,042) (56,870,371)

Unrestricted cash at beginning of period 362,441,363 396,726,923

Unrestricted cash at end of period 354,966,321 339,856,552

<fn>

The accompanying notes are an integral part
of these financial statements.

</table>
<page> MORGAN STANLEY CHARTER GRAHAM L.P.
NOTES TO FINANCIAL STATEMENTS

March 31, 2007
(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 Graham L.P. (the ?Partnership?). The
financial statements and condensed notes herein should be read in
conjunction with the Partnership?s December 31, 2006, Annual
Report on Form 10-K.

1. Organization
Morgan Stanley Charter Graham L.P. is a Delaware limited
partnership organized in 1998 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 WCM L.P., Morgan Stanley Charter Aspect
L.P., and Morgan Stanley Charter Campbell L.P. which effective as
of May 1, 2006, no longer accepts subscriptions and exchanges of
units of limited partnership interest (?Unit(s)?) from any other

<page> MORGAN STANLEY CHARTER GRAHAM L.P.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)

Charter Series of Funds for Units of Morgan Stanley Charter
Campbell L.P.

The Partnership?s general partner is Demeter Management
Corporation (?Demeter?). Effective April 1, 2007, Morgan Stanley
DW Inc. (?Morgan Stanley DW?), which previously acted as the non-
clearing broker, was merged into Morgan Stanley & Co. Incorporated
(?MS&Co.?), which has assumed all of the responsibilities of
Morgan Stanley DW. Upon completion of the merger, MS&Co. has
become the Partnership?s principal commodity broker-dealer
and also acts as the counterparty on all trading of foreign
currency forward contracts. In addition, Morgan Stanley & Co.
International Limited (?MSIL?) serves as the commodity broker for
trades on the London Metal Exchange. Effective April 13, 2007,
Morgan Stanley & Co. International Limited changed its name to
Morgan Stanley & Co. International plc. The commodity brokers
prior to April 1, 2007, were Morgan Stanley DW, MS&Co., and MSIL.
Demeter, MS&Co., and MSIL are wholly-owned subsidiaries of Morgan
Stanley. Graham Capital Management, L.P. (the ?Trading Advisor?)
is the trading advisor to the Partnership.

<page> MORGAN STANLEY CHARTER GRAHAM L.P.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)

2. Related Party Transactions
The Partnership?s cash is on deposit with Morgan Stanley DW
(through March 31, 2007), MS&Co., and MSIL in futures, forward,
and options trading accounts to meet margin requirements as
needed. Effective April 1, 2007, MS&Co. pays the Partnership
monthly interest income on amount equal to the commodity brokers?
margin requirements on the Partnership?s current futures, forward,
and options contracts at a rate approximately equivalent to the
rate the commodity brokers pay other similar customers on margin
deposits. In addition, MS&Co. pays the Partnership monthly
interest income on the Partnership?s funds in excess of such
current margin requirements but available to satisfy margin
requirements at a rate equal to the monthly average of the 4-week
U.S. Treasury bill discount rate during the month. The
Partnership pays brokerage fees to MS&Co. (Morgan Stanley DW,
prior to April 1, 2007). Prior to April 1, 2007, Morgan Stanley
DW paid the Partnership monthly interest income equal to 100% of
its average daily funds held at Morgan Stanley DW at a rate equal
to that earned by Morgan Stanley DW on its U.S. Treasury bill
investments. In addition, Morgan Stanley DW paid the Partnership
interest received from MS&Co. and MSIL with respect to such
Partnership?s assets deposited as margin.

<page> MORGAN STANLEY CHARTER GRAHAM L.P.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)

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
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 exchange-traded contracts is based on the
settlement price quoted by the exchange on the day with respect
to which market value is being determined. If an exchange-traded
contract could not have been liquidated on such day due to the
operation of daily limits or other rules of the exchange, the
settlement price shall be the settlement price on the first
subsequent day on which the contract could be liquidated. The
market value of off-exchange-traded contracts is based on the fair
market value quoted by the counterparty.

<page> MORGAN STANLEY CHARTER GRAHAM L.P.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)

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;
3) Terms require or permit net settlement.

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

The net unrealized gains 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:

<page> MORGAN STANLEY CHARTER GRAHAM L.P.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)

Net Unrealized Gains
on Open Contracts Longest Maturities

Exchange- Off-Exchange- Exchange- Off-Exchange-
Date Traded Traded Total Traded Traded
$ $ $

Mar. 31, 2007 2,268,313 1,721,410 3,989,723 Sep. 2008 Jun. 2007
Dec. 31, 2006 5,466,119 7,071,945 12,538,064 Jun. 2008 Mar. 2007

The Partnership has credit risk associated with counterparty non-
performance. As of the date of the financial statements, the
credit risk associated with the instruments in which the
Partnership trades is limited to the amounts reflected in the
Partnership?s Statements of Financial Condition.

The Partnership also has credit risk because Morgan Stanley DW
(through March 31, 2007), 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, exchange-
traded forward, and exchange-traded futures-styled options
contracts are marked to market on a daily basis, with variations
in value settled on a daily basis. Morgan Stanley DW (through
March 31, 2007), MS&Co., and MSIL, each as a futures commission
merchant for the Partnership?s exchange-traded futures, exchange-
traded forward, and exchange-traded futures-styled options
contracts, are required, pursuant to regulations of the Commodity

<page> MORGAN STANLEY CHARTER GRAHAM L.P.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)

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,
exchange-traded forward, and exchange-traded futures-styled
options contracts, including an amount equal to the net unrealized
gains (losses) on all open exchange-traded futures, exchange-
traded forward, and exchange-traded futures-styled options
contracts, which funds, in the aggregate, totaled $368,008,243
and $422,467,679 at March 31, 2007, and December 31, 2006,
respectively. With respect to the Partnership?s off-exchange-
traded forward currency contracts, there are no daily settlements
of variation in value, nor is there any requirement that an amount
equal to the net unrealized gains (losses) on such contracts be
segregated. However, the Partnership is required to meet margin
requirements equal to the net unrealized loss on open forward
currency contracts in the Partnership accounts with the
counterparty, which is accomplished by daily maintenance of the
cash balance in a custody account held at Morgan Stanley DW for
the benefit of MS&Co. 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. This
agreement, which seeks to reduce both the Partnership?s and

<page> MORGAN STANLEY CHARTER GRAHAM L.P.
NOTES TO FINANCIAL STATEMENTS (CONCLUDED)

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.

4. New Accounting Developments
In July 2006, the Financial Accounting Standards Board (?FASB?)
issued interpretation No. 48, ?Accounting for Uncertainty in
Income Taxes ? an interpretation of FASB Statement 109? (?FIN
48?). FIN 48 clarifies the accounting for income taxes by
prescribing the minimum recognition threshold a tax position must
meet before being recognized in the financial statements. FIN 48
is effective for the Partnership as of January 1, 2007. Based on
its analysis, management believes that the adoption of FIN 48
will not impact the Partnership?s Financial Statements.

In September 2006, the FASB issued SFAS No. 157, ?Fair Value
Measurements? (?SFAS No. 157?). SFAS No. 157 defines fair value,
establishes a framework for measuring fair value, and expands
disclosures about fair value measurements. SFAS No. 157 is
effective for the Partnership as of January 1, 2008. The impact
to the Partnership?s Financial Statements, if any, is currently
being assessed.

<page>
Item 2. MANAGEMENT?S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS

Liquidity. The Partnership deposits its assets with Morgan
Stanley DW (through March 31, 2007), MS&Co., and MSIL as commodity
brokers in separate futures, forward, and options trading accounts
established for the Trading Advisor. Such 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 <page>
<page> 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 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 does it
expect to have, any capital assets. Redemptions, exchanges, and
sales of Units in the future will affect the amount of funds
available for investments in futures, forwards, and options in
subsequent periods. It is not possible to estimate the amount,
and therefore the impact, of future inflows and outflows of Units.
<page> 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 programs to take
advantage of price movements in the futures, forward, and options
markets. The following presents a summary of the Partnership?s
operations for the three month periods ended March 31, 2007, and
2006 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
<page> 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 13 of this report are
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. 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 a foreign currency
forward contract is based on the spot rate as of the close of
business. Interest income, as well as management fees, incentive
fees, and brokerage fees expenses of the Partnership are recorded
on an accrual basis.

<page> 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 Ended March 31, 2007
The Partnership recorded total trading results including interest
income totaling $(35,799,022) and expenses totaling $8,072,169,
resulting in a net loss of $43,871,191 for the quarter ended
March 31, 2007. The Partnership?s net asset value per Unit
decreased from $19.46 at December 31, 2006, to $17.41 at March
31, 2007.

The most significant trading losses of approximately 3.1% were
incurred in the currency sector primarily during January from
long positions in the New Zealand dollar, Australian dollar, and
euro versus the U.S. dollar as the value of the U.S. dollar
strengthened after a government report showed that U.S. job
growth had been unexpectedly higher during December 2006, cooling
speculation that the U.S. Federal Reserve would cut interest
rates in the near-term. Additionally, the value of the U.S.
dollar continued to move higher against most of its major rivals
after news that the U.S. trade gap contracted for a third
consecutive month in November, reaching its narrowest point since
July 2005. Additional losses were experienced during March from
long positions in the New Zealand dollar and the euro versus the
U.S. dollar as the value of the New Zealand dollar declined early
<page> in the month after the Reserve Bank of New Zealand
indicated that interest rates might remain steady in the near-
term, while the euro weakened at the beginning of the month due
to investor uncertainty regarding the strength of the global
economy after the substantial sell-off in the global equity
markets in late February. Additional losses in the currency
markets were incurred from short positions in the Swiss franc
versus the U.S. dollar as the value of the Swiss franc
strengthened in February and March on news that Switzerland?s
economy had accelerated faster than expected, thereby increasing
the likelihood of an interest rate hike by the Swiss National
Bank. Smaller losses were incurred from both long and short
positions in the South African rand versus the U.S. dollar.
Additional losses of approximately 2.9% were incurred in the
global interest rate sector, primarily during February from short
positions in U.S and European fixed-income futures as prices
reversed sharply higher at the end of February due to a worldwide
flight to quality after a sell-off in the global equity markets
that began on February 27, 2007, following comments from former
U.S. Federal Reserve Chairman Alan Greenspan that the U.S.
economy could be due for a recession. In addition, concerns that
tighter credit conditions in China and Japan might dampen global
growth first sent Chinese stock markets plunging before the sell-
off spread to other equity markets. Further losses of
approximately 1.8% were experienced in the global stock index
futures markets from long positions in U.S., European, and <page>
Pacific Rim equity index futures as price fell suddenly and
sharply at the end of February and early March due to the
aforementioned factors that affected the currency and global
interest rate markets. Additional losses of approximately 1.6%
were recorded in the energy sector primarily during January and
February from short positions in natural gas futures as prices
reversed higher amid colder weather in U.S Northeast and news
from the U.S. Department of Energy that supplies were weaker than
expected. Smaller losses in the energy markets were experienced
during February and March from short futures positions in crude
oil as prices moved higher amid geopolitical uncertainty in Iraq,
worries that Iran would continue with its nuclear program, and
news that Iran had captured 15 members of the British Royal Navy
in the Persian Gulf. Losses of approximately 0.8% were
experienced in the metals sector during January from long
positions in aluminum and zinc as prices declined amid news of a
slowdown in the U.S. housing market. During February and March,
short positions in copper futures resulted in losses as prices
moved higher on continued speculation that low stockpiles and
supply disruptions might create a supply shortage in the future
and news of stronger than expected Chinese industrial data.
Lastly, smaller losses of approximately 0.1% were recorded in the
agricultural sector, primarily during January from long positions
in coffee futures as prices fell on speculation that retail price
increases might curb demand in the United States. Elsewhere in
the agricultural sector, long positions in corn futures recorded
<page> losses as prices declined sharply during March after the
U.S. Department of Agriculture?s Prospective Plantings report
showed corn acreage might be up this year to its highest since
1944.

For the Quarter Ended March 31, 2006
The Partnership recorded total trading results including interest
income totaling $22,768,809 and expenses totaling $8,382,502,
resulting in net income of $14,386,307 for the quarter ended
March 31, 2006. The Partnership?s net asset value per Unit
increased from $18.60 at December 31, 2005, to $19.24 at March
31, 2006.

The most significant trading gains of approximately 5.2% were
recorded in the global stock index futures markets from long
positions in European stock index futures as global equity
markets trended higher during the quarter on strong corporate
earnings and solid economic data out of the European Union,
Australia, Japan, and the United States. Within the global
interest rate futures markets, gains of approximately 2.6% were
recorded, primarily during March, from short positions in the
U.S., European, and Japanese interest rate futures as global bond
prices trended lower amid strength in regional equity markets and
investor sentiment that interest rates in the United States, the
European Union, and Japan would rise. Additional gains of
approximately 0.2% were experienced in the metals markets during
<page> January and March from long positions in copper futures as
prices strengthened amid weak supplies, forecasts for continued
buying by China, and acceleration in demand from Japan, Europe,
and the U.S. A portion of these gains for the quarter was offset
by losses of approximately 3.1% in the currency markets from long
U.S. dollar positions versus the Swiss franc and the euro as the
U.S. dollar?s value reversed lower against these currencies
during January on expectations that a string of increases in
interest rates by the U.S. Federal Reserve would soon come to an
end. Also pushing the value of the U.S. dollar lower against its
rivals was speculation that China, with a massive U.S. dollar
reserve, might move to diversify some of its assets into other
currencies. Further losses in the currency sector were
experienced during February from long positions in the South
African rand versus the U.S. dollar as the value of this
?commodity currency? moved lower in tandem with gold prices.
During March losses were experienced from long U.S. dollar
positions relative to the euro and the Swiss franc as European
currencies reversed higher after the release of generally
positive economic data from the Euro-Zone reinforced expectations
that European interest rates would continue to rise. Additional
losses were recorded during March from long positions in the
Canadian dollar against the U.S. dollar as the value of the
Canadian dollar decreased on sentiment that the Bank of Canada
had reached the end of its rate increases and news that the
Canadian economy edged up 0.2% in January, a pace slower than
<page> that of the previous three months. Losses were also
incurred during March from long positions in the Mexican peso
versus the U.S. dollar as the value of the peso weakened on
political uncertainty in Mexico. Within the agricultural
markets, losses of approximately 0.6% were recorded primarily
during January from short positions in coffee futures as prices
increased sharply early in the month amid news of a smaller crop
in Brazil, the world?s largest producer. Additional losses were
experienced from newly established long positions in coffee
futures during February as prices reversed lower. Elsewhere in
the agricultural sector, losses were experienced during March
from long positions in wheat futures as prices fell on forecasts
for above-average rainfall in the U.S. growing regions. Smaller
losses of approximately 0.4% were experienced in the energy
markets during February from long futures positions in crude oil
and its related products as prices declined after an announcement
by Chinese government authorities that China would place an
emphasis on prospecting alternative energy sources in the future,
reports of larger than expected supplies from the International
Energy Agency, and mild weather in the U.S. Northeast. Further
losses in the energy markets were recorded during March from
short positions in crude oil futures as prices strengthened early
in the month on supply fears fueled by news of geopolitical
tensions in Nigeria and Iran.

<page>
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, exchange-traded forward, and exchange-traded
futures-styled options contracts are settled daily through
variation margin. Gains and losses on off-exchange-traded forward
currency contracts are settled upon termination of the contract.
However, the Partnership is required to meet margin requirements
equal to the net unrealized loss on open contracts in the <page>
Partnership accounts with the counterparty, which is accomplished
by daily maintenance of the cash balance in a custody account
held at Morgan Stanley DW for the benefit of MS&Co.

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 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 typically to be many times the total
capitalization of the Partnership.

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 and use of
leverage may cause future losses and volatility (i.e., ?risk of
ruin?) that far exceed the Partnership?s experience to date under
the ?Partnership?s Value at Risk in Different Market Sectors?
<page> section and significantly exceed the Value at Risk (?VaR?)
tables disclosed.

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 VaR. The
Partnership estimates VaR using a model based upon historical
simulation (with a confidence level of 99%) which involves <page>
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 re-values 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
<page> 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 March 31, 2007 and 2006. At
March 31, 2007 and 2006, the Partnership?s total capitalization
was approximately $364 million and $423 million, respectively.

Primary Market March 31, 2007 March 31, 2006
Risk Category Value at Risk Value at Risk

Currency (1.37)% (1.15)%
Interest Rate (0.82) (3.49)
Equity (0.15) (3.32)
Commodity (0.33) (0.31)
Aggregate Value at Risk (1.38)% (6.04)%

<page> 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. Such changes 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 April 1, 2006, through March 31, 2007.

Primary Market Risk Category High Low Average
Currency (2.61)% (0.37)% (1.22)%

Interest Rate (1.31) (0.69) (0.98)

Equity (3.14) (0.13) (1.49)

Commodity (0.33) (0.27) (0.28)

Aggregate Value at Risk (4.19)% (0.75)% (2.21)%

<page>
Limitations on Value at Risk as an Assessment of Market Risk
VaR models permit estimation of a portfolio?s aggregate market
risk exposure, incorporating a range of varied market risks,
reflect risk reduction due to portfolio diversification or hedging
activities, and can cover a wide range of portfolio assets.
However, VaR risk measures should be viewed in light of the
methodology?s limitations, which include, but may not be limited
to 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.

<page> In addition, the VaR tables above, as well as the past
performance of the Partnership, give no indication of the
Partnership?s potential ?risk of ruin?.

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 March 31, 2006, and for the four quarter-end
reporting periods from April 1, 2006, through March 31, 2007. 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. These balances and any market risk they may represent
are immaterial.

The Partnership also maintains a substantial portion of its
available assets in cash at MS&Co. (Morgan Stanley DW, prior to
April 1, 2007); as of March 31, 2007, such amount is equal to
approximately 98% of the Partnership?s net asset value. A decline
in short-term interest rates would result in a decline in the
<page> 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
<page> 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 March 31, 2007, by market sector. It may be
anticipated, however, that these market exposures will vary
materially over time.

Currency. The largest market exposure of the Partnership at
March 31, 2007, 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. The Partnership trades a large
number of currencies, including cross-rates - i.e., positions
between two currencies other than the U.S. dollar. At March 31,
2007, the Partnership?s major exposures were to the euro,
Canadian dollar, Australian dollar, Japanese yen, Swiss franc,
and British pound currency crosses, as well as to outright U.S.
dollar positions. Outright positions consist of the U.S. dollar
vs. other currencies. These other currencies include major and
<page> minor currencies. Demeter does not anticipate that the
risk associated with the Partnership?s currency trades will
change significantly in the future.

Interest Rate. The second largest market exposure of the
Partnership at March 31, 2007, was to the global interest rate
sector. Exposure was primarily spread across the European, U.S.,
Japanese, and Australian 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. However, the
Partnership also takes futures positions in the government debt
of smaller nations - e.g., Australia. Demeter anticipates that
the G-7 countries? and Australian 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.

<page> Equity. At March 31, 2007, the Partnership had market
exposure to the global stock index sector, primarily 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 March 31, 2007, The Partnership?s primary market
exposures were to the DAX (Germany), NASDAQ 100 (U.S.), TOPIX
(Japan), CAC 40 (France), S&P 500 (U.S.), IBEX 35 (Spain), Euro
Stoxx 50 (Europe), FTSE 100 (United Kingdom), Hang Seng (China),
and Nikkei 225 (Japan) stock indices. The Partnership is
typically exposed to the risk of adverse price trends or static
markets in the European, U.S., Chinese, 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. The third largest market exposure of the Partner-
ship at March 31, 2007, was to the energy sector. The
Partnership?s energy exposure was shared primarily by
futures contracts in natural gas, as well as crude oil and
its related products. 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 <page>
volatility in prices resulting from weather patterns and
supply and demand factors and will likely continue in this
choppy pattern.

Soft Commodities and Agriculturals. At March 31, 2007, the
Partnership had market exposure to the markets that comprise
these sectors. Most of the exposure was to the coffee,
cocoa, wheat, sugar, and soybean meal markets. Supply and
demand inequalities, severe weather disruptions, and market
expectations affect price movements in these markets.

Metals. At March 31, 2007, the Partnership had market
exposure in the metals sector. The Partnership?s metals
exposure was to fluctuations in the price of precious metals
such as gold, and base metals such as copper. Economic
forces, supply and demand inequalities, geopolitical
factors, and market expectations influence price movements
in these markets. The Trading Advisor utilizes its trading
system(s) to take 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 March 31, 2007:

<page> Foreign Currency Balances. The Partnership?s primary
foreign currency balances at March 31, 2007, were in euros,
British pounds, Swiss francs, Hong Kong dollars, Japanese
yen, and Australian dollars. 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 <page>
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 material changes during the period
covered by this quarterly report in the Partnership?s
internal control over financial reporting (as defined in
Rules 13a-15(f) and 15d-15(f) of the Exchange Act) or in
other factors that could significantly affect these controls
subsequent to the date of their evaluation.

Item 4T. CONTROLS AND PROCEDURES
Not applicable.

<page> PART II. OTHER INFORMATION
Item 1A. RISK FACTORS
There have been no material changes from the risk factors
previously referenced in the Partnership?s Report on Form 10-K for
the fiscal year ended December 31, 2006.

Item 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF
PROCEEDS
<table>
<catpion>
SEC
Registration Statement on Form S-1 Units Registered Effective Date File Number
<s> <c> <c> <c>
Initial Registration 3,000,000.000 November 6, 1998 333-60115
Additional Registration 6,000,000.000 March 27, 2000 333-91563
Additional Registration 2,000,000.000 July 29, 2002 333-85076
Additional Registration 9,000,000.000 February 26, 2003 333-103166
Additional Registration 30,000,000.000 April 28, 2004 333-113876
Total Units Registered 50,000,000.000

Units sold through 3/31/07 36,826,096.379
Units unsold through 3/31/07 13,173,903.621
</table>

The managing underwriter for the Partnership is MS&Co. (Morgan
Stanley DW, prior to April 1, 2007).

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.

The aggregate price of the Units sold through March 31, 2007, was
$687,788,640.

<page> 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 6. EXHIBITS

31.01 Certification of President of Demeter Management
Corporation, the general partner of the Partnership,
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 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.

<page>

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 Graham L.P.
(Registrant)

By: Demeter Management Corporation
(General Partner)

May 15, 2007 By: /s/ Lee Horwitz
Lee Horwitz
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.

? 6 ?

DEAN WITTER PORTFOLIO STRATEGY FUND L.P.
NOTES TO FINANCIAL STATEMENTS (CONCLUDED)