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 March 31, 2008 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 No. 0-13299

	MORGAN STANLEY CORNERSTONE FUND III L.P.

	(Exact name of registrant as specified in its charter)

		New York						     13-3190919
(State or other jurisdiction of		   	  	  (I.R.S. Employer
incorporation or organization)			        Identification No.)

Demeter Management Corporation
522 Fifth Avenue, 13th Floor
New York, NY                                 	         10036
(Address of principal executive offices)	  	      (Zip Code)

Registrant?s telephone number, including area code     (212) 296-1999






(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, a non-accelerated filer, or a smaller
reporting company.  See the definitions of "large accelerated filer",
"accelerated filer" and "smaller reporting company" in Rule 12b-2 of the
Exchange Act.

Large accelerated filer_______ 		Accelerated filer_______
Non-accelerated filer   X   		Smaller reporting company_______

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 CORNERSTONE FUND III L.P.

	INDEX TO QUARTERLY REPORT ON FORM 10-Q

	March 31, 2008

<caption>



PART I. FINANCIAL INFORMATION

				<c>
Item 1. Financial Statements

		Statements of Financial Condition as of March 31, 2008
		(Unaudited) and December 31, 2007..........................2

		Statements of Operations for the Quarters
		Ended March 31, 2008 and 2007 (Unaudited) .................3

		Statements of Changes in Partners? Capital for the
		Quarters Ended March 31, 2008 and 2007 (Unaudited) ........4

		Statements of Cash Flows for the Quarters Ended
		March 31, 2008 and 2007 (Unaudited)........................5

		Condensed Schedules of Investments as of March 31, 2008
		(Unaudited) and December 31, 2007..........................6

		Notes to Financial Statements (Unaudited)...............7-15

Item 2.	Management?s Discussion and Analysis of
			Financial Condition and Results of Operations.......16-26

Item 3.	Quantitative and Qualitative Disclosures About
			Market Risk.........................................26-40

Item 4.	Controls and Procedures................................40

Item 4T.	Controls and Procedures................................41


PART II. OTHER INFORMATION

Item 1A.Risk Factors...........................................42

Item 5.	Other Information...................................42-44

Item 6.	Exhibits...............................................44
</table>


<page> <table> PART I.  FINANCIAL INFORMATION

Item 1.  Financial Statements

	MORGAN STANLEY CORNERSTONE FUND III L.P.
	STATEMENTS OF FINANCIAL CONDITION
<caption>
	                     March 31,	    December  31,
	      2008     	         2007
	                      $	      $
	                     (Unaudited)
ASSETS

	<c>	<c>
Trading Equity:
	Unrestricted cash	11,205,236	15,925,629
	Restricted cash	     8,743,772	     1,251,653

	    Total cash	  19,949,008	      17,177,282

	Net unrealized gain on open contracts (MS&Co.)	539,411       	        741,994
	Net unrealized gain on open contracts (MSIP)	                                          146,805	                    54,095

	     Total net unrealized gain on open contracts	       686,216	        796,089

	     Total Trading Equity	20,635,224  	17,973,371

Interest receivable (MS&Co.)	19,268	                     36,546
Due from MS&Co.	                                    -             	          12,811

	     Total Assets	  20,654,492	   18,022,728

LIABILITIES AND PARTNERS? CAPITAL

Liabilities

Redemptions payable	348,845	159,039
Accrued administrative expenses	124,071	111,753
Accrued management fees	         59,880	          52,241

	     Total Liabilities	       532,796	        323,033

Partners? Capital

Limited Partners (4,023.742 and
	  4,175.524 Units, respectively)	19,621,777   	17,275,552
General Partner (102.516 Units)		       499,919	        424,143

	     Total Partners? Capital	   20,121,696	   17,699,695

	     Total Liabilities and Partners? Capital                                                   20,654,492	   18,022,728

NET ASSET VALUE PER UNIT	        4,876.50	       4,137.34
<fn>

The accompanying notes are an integral part
of these financial statements.
</table>
- 2 -
<page> <table>	MORGAN STANLEY CORNERSTONE FUND III L.P.
	STATEMENTS OF OPERATIONS
(Unaudited)

<caption>

  	   	     For the Quarters Ended March 31,


                                                                         		           2008    	      2007
                                                                               	                       $		         $

		<c>		<c>
INVESTMENT INCOME
	Interest income (MS&Co.)		            82,654			       204,140

EXPENSES
	Management fees 	      	173,086	173,217
	Brokerage commissions (MS&Co.)		172,766	228,715
	Common administrative expenses	        	21,000	 24,000
	Transaction fees and costs		          7,965	         13,060

		Total Expenses		      374,817	       438,992

NET INVESTMENT LOSS	     (292,163)	      (234,852)

TRADING RESULTS
Trading profit (loss):
	Realized			3,535,956	(1,627,641)
	Net change in unrealized		     (109,873)	      (188,141)

    		Total Trading Results		   3,426,083	   (1,815,782)

NET INCOME (LOSS)  	   3,133,920	    (2,050,634)


NET INCOME (LOSS) ALLOCATION

	Limited Partners                                                  		3,058,144	  (2,008,038)
   	General Partner                                                  		         75,776	       	(42,596)


NET INCOME (LOSS) PER UNIT

	Limited Partners                                                   		739.16	(415.50)
	General Partner                                                   		        739.16	     (415.50)


			          Units     	                             Units
WEIGHTED AVERAGE NUMBER
	OF UNITS OUTSTANDING                          	   4,208.882		   4,955.537
<fn>
	The accompanying notes are an integral part
	of these financial statements.
</table>
- 3 -
<page> <table> 	MORGAN STANLEY CORNERSTONE FUND III L.P.
	STATEMENTS OF CHANGES IN PARTNERS? CAPITAL
	For the Quarters Ended March 31, 2008 and 2007
	(Unaudited)
<caption>




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

	<c>	<c>	<c>	<c>
Partners? Capital,
December 31, 2006	5,031.180	20,157,999	419,286	20,577,285

Net Loss	?	(2,008,038)	(42,596)	(2,050,634)

Redemptions	   (162.628)	     (637,397) 	        ?  	      	        (637,397)

Partners? Capital,
March 31, 2007	           4,868.552	  17,512,564	             376,690	 17,889,254





Partners? Capital,
December 31, 2007	4,278.040	17,275,552	424,143	17,699,695

Net Income	?	3,058,144	75,776	3,133,920

Redemptions	   (151.782)	     (711,919) 	        ?  	      	        (711,919)

Partners? Capital,
March 31, 2008	           4,126.258	  19,621,777	             499,919	 20,121,696








<fn>




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

-	4 -
<page> <table> 	MORGAN STANLEY CORNERSTONE FUND III L.P.
	STATEMENTS OF CASH FLOWS
(Unaudited)

<caption>

	         For the Quarters Ended March 31,

	      2008     	      2007
	    $	      $


	<c>	<c>
CASH FLOWS FROM OPERATING ACTIVITIES

Net income (loss)	  3,133,920		    	 (2,050,634)
Noncash item included in net income (loss):
	Net change in unrealized		109,873	   188,141

(Increase) decrease in operating assets:
	Restricted cash		(7,492,119) 	1,119,740
	Interest receivable (MS&Co.)		17,278	6,560
	Due from MS&Co.                 	 	    12,811	12,554

Increase (decrease) in operating liabilities:
	Accrued administrative expenses		12,318	1,786
	Accrued management fees                                               		             7,639	           (8,241)

Net cash provided by (used for) operating activities  			  (4,198,280)	       (730,094)

CASH FLOWS FROM FINANCING ACTIVITIES

Cash paid for redemptions of Units			         (522,113)	       (766,487)

Net cash used for financing activities               	      (522,113)	      (766,487)

Net increase (decrease) in unrestricted cash                                     	(4,720,393)	 (1,496,581)

Unrestricted cash at beginning of period                                   	    15,925,629                  17,796,766

Unrestricted cash at end of period                                            		     11,205,236 	                 16,300,185





<fn>


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


</table>
- 5 -


<page> <table> MORGAN STANLEY CORNERSTONE FUND III L.P.
CONDENSED SCHEDULES OF INVESTMENTS
March 31, 2008 (Unaudited) and December 31, 2007


				<caption>





Futures and Forward Contracts
     Long
 Unrealized
     Gain/(Loss)

Percentage of
  Net Assets
    Short
 Unrealized
Gain/(Loss)

Percentage of
   Net Assets
      Net
Unrealized
Gain/(Loss)

$
%
$
%
$

March 31, 2008, Partnership Net Assets:   $20,121,696





<c>
<c>
<c>
<c>
<c>
Commodity
      92,855
        0.46
          650
         ?
   93,505
Equity
      3,196
        0.02
       (133,220)
       (0.66)
(130,024)
Foreign currency
    418,939
        2.08
   276,197
        1.37
 695,136
Interest rate
      17,609
        0.09
         ?
         ?
   17,609






     Grand Total:
    532,599
        2.65
   143,627
        0.71
 676,226

     Unrealized Currency Gain





     9,990

     Total Net Unrealized Gain



686,216







December 31, 2007, Partnership Net Assets:  $17,699,695









Commodity
    413,874
        2.34
     53,390
        0.30
 467,264
Equity
    22,161
        0.13
     92,328
        0.52
 114,489
Foreign currency
   (119,794)
       (0.68)
   190,608
        1.07
   70,814
Interest rate
    163,283
        0.92
     (2,579)
       (0.01)
 160,704






     Grand Total:
    479,524
        2.71
   333,747
        1.88
 813,271

     Unrealized Currency Loss





 (17,182)

     Total Net Unrealized Gain



796,089



<fn>





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

</table>
<page> MORGAN STANLEY CORNERSTONE FUND III L.P.
NOTES TO FINANCIAL STATEMENTS
March 31, 2008
(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 Cornerstone Fund III L.P. (the "Partnership").
The financial statements and condensed notes herein should be read
in conjunction with the Partnership?s December 31, 2007, Annual
Report on Form 10-K.

1.  Organization
Morgan Stanley Cornerstone Fund III L.P. is a New York limited
partnership organized in 1983 to engage in the speculative trading
of futures contracts, options on futures contracts, and forward
contracts on foreign currencies and other commodity interests
(collectively, ?Futures Interests?).  The Partnership is one of
the Morgan Stanley Cornerstone Funds, comprised of the
Partnership, Morgan Stanley Cornerstone Fund II L.P., and Morgan
Stanley Cornerstone Fund IV L.P.

The Partnership?s general partner is Demeter Management
Corporation ("Demeter").  The commodity brokers are Morgan Stanley

                                - 7 -
<page> MORGAN STANLEY CORNERSTONE FUND III L.P.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)


& Co. Incorporated ("MS&Co.") and Morgan Stanley & Co.
International plc ("MSIP").  MS&Co. also acts as the counterparty
on all trading of foreign currency forward contracts.  MSIP serves
as the commodity broker for trades on the London Metal Exchange.
Demeter, MS&Co., and MSIP are wholly-owned subsidiaries of Morgan
Stanley. The trading managers to the Partnership are Graham
Capital Management, L.P. and Sunrise Capital Management, Inc.
(individually, a "Trading Manager", or collectively, the "Trading
Managers").

2.  Related Party Transactions
The Partnership?s cash is on deposit with MS&Co. and MSIP in
futures, forward, and options trading accounts to meet margin
requirements as needed. Monthly, MS&Co. pays the Partnership
interest income on 80% of its average daily Net Assets at a rate
equal to the average yield on 13-week U.S. Treasury bills. The
Partnership pays brokerage commissions to MS&Co.



3.  Income Taxes
No provision for income taxes has been made in the accompanying
financial statements, as partners are individually responsible for
reporting income or loss based upon their respective share of the
Partnership?s revenues or expenses for income tax purposes.

                                - 8 -
<page> MORGAN STANLEY CORNERSTONE FUND III L.P.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)


The Partnership files U.S. federal and state tax returns.  The
2004 through 2007 tax years generally remain subject to
examination by U.S. federal and most state tax authorities.

4.  Financial Instruments
The Partnership trades Futures Interests.  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.

- 9 -
<page> MORGAN STANLEY CORNERSTONE FUND III 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 (losses) on open contracts, reported as a
component of "Trading Equity" on the Statements of Financial
Condition, and their longest contract maturities were as follows:

- 10 -
<page> MORGAN STANLEY CORNERSTONE FUND III L.P.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)

	    Net Unrealized Gains/(Losses)
	on Open Contracts	Longest Maturities
		Off-			Off-
	Exchange-	Exchange-		Exchange-	Exchange-
Date	 Traded  	  Traded   	Total	 Traded  	 Traded
	 $	  $	$

Mar. 31, 2008	(8,407)	694,623	686,216	Mar. 2009	Jun. 2008
Dec. 31, 2007	725,294	70,795	796,089	Jun. 2009	Mar. 2008


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 MS&Co. and MSIP 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. MS&Co. and
MSIP, each acting as a commodity broker 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 Futures Trading Commission ("CFTC"),
to segregate from their own assets, and for the sole benefit of

- 11 -
<page> MORGAN STANLEY CORNERSTONE FUND III L.P.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)

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
$19,940,601 and $17,902,576 at March 31, 2008, and December 31,
2007, 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 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 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.
                              - 12 -
<page> MORGAN STANLEY CORNERSTONE FUND III L.P.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)


5.  New Accounting Developments

In September 2006, the Financial Accounting Standards Board
("FASB") issued Statement of Financial Accounting Standards No.
157 ("SFAS" 157"), "Fair Value Measurements".  SFAS 157 requires
use of a fair value hierarchy that prioritizes the inputs to
valuation techniques used to measure fair value into three
levels: Level 1 - quoted market prices in active markets for
identical assets and liabilities; Level 2 - inputs other than
quoted market prices that are observable for the asset or
liability, either directly or indirectly (including quoted prices
for similar investments, interest rates, credit risk); and Level
3 - unobservable inputs for the asset or liability (including the
Partnership?s own assumptions used in determining the fair value
of investments).

Demeter evaluated the impact of adopting SFAS 157 on the
Partnership?s financial statements.  The Partnership adopted SFAS
157 as of January 1, 2008. Based on its analysis, the effect of
applying SFAS 157 to the investments included in the financial
statements does not have a material impact on the Partnership?s
financial statements.


- 13 -
<page> MORGAN STANLEY CORNERSTONE FUND III L.P.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)

The following table summarizes the valuation of the Partnership?s
investments by the above SFAS 157 fair value hierarchy as of
March 31, 2008:
<table>



Assets
   Quoted Prices in
  Active Markets for
    Identical Assets
          (Level 1)
Significant Other
     Observable
         Inputs
       (Level 2)
Significant
  Unobservable
   Inputs
 (Level 3)




           Total


<c>
<c>
 <c>

<c>
Unrealized gain(loss) on open contracts
 $       (8,407)
$    694,623
 n/a

 $  686,216
</table>
In March 2008, the FASB issued SFAS No. 161, Disclosures about
Derivative Instruments and Hedging Activities ("SFAS 161").  SFAS
161 is intended to improve financial reporting about derivative
instruments and hedging activities by requiring enhanced
disclosures to enable investors to better understand how those
instruments and activities are accounted for; how and why they are
used; and their effects on a Partnership?s financial position,
financial performance, and cash flows.  SFAS 161 is effective for
financial statements issued for fiscal years beginning after
November 15, 2008, and interim periods within those fiscal years.
The Partnership is currently evaluating the impact that the
adoption of SFAS No. 161 will have on its financial statement
disclosures.


                            - 14 -
<page> MORGAN STANLEY CORNERSTONE FUND III L.P.
NOTES TO FINANCIAL STATEMENTS (CONCLUDED)

6.  Restricted and Unrestricted Cash
As reflected on the Partnership?s Statements of Financial
Condition, restricted cash equals the cash portion of assets on
deposit to meet margin requirements plus the cash required to
offset unrealized losses on foreign currency forwards and options
and offset losses on offset London Metal Exchange positions.  All
of these amounts are maintained separately.  Cash that is not
classified as restricted cash is therefore classified as
unrestricted cash.

7.  Reclassification
Certain prior year amounts relating to cash balances were
reclassified on the Statements of Cash Flows to conform to 2008
presentation.  Such reclassification has no impact on the
Partnership?s reported net income (loss).








- 15 -


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


Liquidity.  The Partnership deposits its assets with MS&Co. and
MSIP as commodity brokers in separate futures, forward, and
options trading accounts established for each Trading Manager.
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

- 16 -
<page> 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 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 of units of
limited partnership interest ("Unit(s)") in the future will affect
                               - 17 -
<page> forwards, and options in subsequent periods.  It is not
possible to estimate the amount, and therefore the impact, of
future outflows 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 Managers
and the ability of each Trading Manager?s trading program(s) 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, 2008 and 2007, and a general discussion of its trading
activities during each period.  It is important to note, however,
that the Trading Managers trade 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 Managers
                               - 18 -
<page> 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 Managers? 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 15 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 gain (loss)" for open
(unrealized) contracts, and recorded as "Realized trading gain
(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


- 19 -
<page> well as management fees, incentive fees, brokerage
commissions, and transaction fees and costs 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 Ended March 31, 2008
The Partnership recorded total trading results including interest
income totaling $3,508,737 and expenses totaling $374,817,
resulting in net income of $3,133,920 for the quarter ended March
31, 2008. The Partnership?s net asset value per Unit increased
from $4,137.34 at December 31, 2007, to $4,876.50 at March 31,
2008.

The most significant trading gains of approximately 6.1% were
recorded in the currency sector during February from long
positions in the Swiss franc and euro versus the U.S. dollar as
the value of the U.S. dollar moved lower against its major rivals
after weaker-than-expected manufacturing data from the Federal
Reserve Bank of Philadelphia reignited fears of an economic
slowdown in the U.S.  In addition, the value of the U.S. dollar
continued to decline after U.S. government reports showed a rise
                            - 20 -
<page> in unemployment and slower-than-expected fourth quarter
2007 Gross Domestic Product growth. During March, the value of
the U.S. dollar continued to decline following news of weaker-
than-expected U.S. retail sales, and U.S. consumer confidence at
a 16-year low. Lastly, the value of the U.S. dollar was pulled
lower due to several interest rate cuts by the U.S. Federal
Reserve, as well as indications that interest rates may continue
to decline. Additional gains of approximately 3.7% were
experienced in the global stock index sector from short positions
in Japanese, European, and U.S. equity index futures as prices
moved lower throughout the quarter on concerns that a persistent
U.S. housing slump, mounting losses linked to U.S. sub-prime
mortgage investments, and a weakening job market may restrain
consumer spending. Within the global interest rate sector, gains
of approximately 3.6% were achieved during January from long
positions in U.S. and Japanese fixed-income futures as prices
increased amid stronger demand for the "safety" of government
bonds following a sharp decline in global equity markets and
concerns that a possible economic recession in the United States
may weaken the global economy. Further gains of approximately
1.5% were experienced in the agricultural complex primarily
during February from long futures positions in corn as prices
moved higher amid speculation that demand from China may climb
after severe winter storms damaged some of the nation?s major
crops. Elsewhere, long positions in wheat futures recorded gains
                              - 21 -
<page> as prices rose to a record high in February on
expectations that stockpiles may fall to a 30-year low.
Elsewhere, long positions in cotton futures resulted in further
gains primarily during February as prices increased on
speculation that future production may fall. Within the energy
sector, gains of approximately 1.4% were recorded during February
and March from long futures positions in crude oil and its
related products as prices surged due to speculation that OPEC
may cut production at its next meeting, forecasts of cold weather
and heavy snow in the U.S. Northeast, and ongoing geopolitical
concerns in the Middle East. Elsewhere in the energy markets,
gains were recorded from long positions in natural gas futures as
prices rose during February amid expectations of a rise in demand
and news that U.S. inventories fell more than forecast. Finally,
gains of approximately 1.1% were achieved within the metals
sector from long positions in gold and silver futures as prices
increased due to a declining U.S. dollar and concerns of
accelerating global inflation, which increased demand for the
"safe haven" of precious metals.

For the Quarter Ended March 31, 2007
The Partnership recorded total trading results including interest
income totaling $(1,611,642) and expenses totaling $438,992,
resulting in a net loss of $2,050,634 for the quarter ended March
31, 2007. The Partnership?s net asset value per Unit decreased
                             - 22 -
<page> from $4,089.95 at December 31, 2006, to $3,674.45 at March
31, 2007.

The most significant trading losses of approximately 2.5% were
recorded in the metals markets primarily during February and
March from long positions in silver and gold futures as prices
reversed sharply lower on concerns that a slowing Chinese economy
would reduce demand for precious metals.  Elsewhere in the metals
markets, losses were experienced from long positions in aluminum
futures during January and March as prices fell amid news of an
overabundance in supply.  Additional losses of approximately 2.4%
were experienced in the currency sector during March from long
positions in the British pound versus the U.S. dollar as the
value of the British pound dropped sharply at the beginning of
the month amid speculation that the Bank of England would not
continue to increase interest rates in the near-term.  Elsewhere
in the currency markets, short positions in the Japanese yen
versus the U.S. dollar resulted in losses during February and
early March as the value of the Japanese yen reversed sharply
higher against the U.S. dollar after a combination of factors
including an almost 10% drop in the Shanghai stock market and a
warning from Rodrigo Rato, Managing Director of the International
Monetary Fund, that a weak Japanese yen "could lead to more
entrenched exchange rate misalignments that worsen global
imbalances" encouraged traders to unwind short positions in the
                              - 23 -
<page> Japanese yen against most of its major rivals.
Furthermore, investor speculation that consistently strong
economic data out of Japan might force the Bank of Japan to
continue raising interest rates in order to combat possible
inflation also pushed the value of the Japanese yen higher.
Similarly, short positions in the Swiss franc versus the U.S.
dollar incurred losses during February as the value of the Swiss
franc also reversed higher against the U.S. dollar amid worries
of a narrowing interest rate differential.  Finally, losses were
recorded during January from long positions in the New Zealand
dollar and Australian dollar versus the U.S. dollar as the value
of the U.S. dollar strengthened against these currencies after a
government report showed that U.S. job growth had been
unexpectedly higher during December 2006.  Within the global
stock index sector, losses of approximately 2.0% were experienced
during late February and early March from long positions in U.S.,
European, and Japanese stock index futures as prices reversed
sharply lower after the aforementioned massive 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.  Furthermore,
                            - 24 -
<page> global equity prices were negatively affected by sub-prime
loan delinquency concerns in the United States.  Additional
losses of approximately 1.8% were experienced in the global
interest rate sector from short positions in U.S., German, and
British fixed-income futures as prices spiked significantly
higher during late February and early March in a ?flight-to-
quality? after the worldwide sell-off that affected the global
equity and currency markets.  Additional losses in the global
interest rate futures markets were incurred from newly
established long positions in U.S. fixed-income futures as prices
moved lower later in the month on reduced demand for the "safe
haven" of fixed-income investments after the stabilization of the
global equity markets as investors concluded that markets had
been oversold.  Furthermore, U.S. interest rate futures prices
declined after a stronger-than-expected government jobs report.
Finally, losses of approximately 1.8% were recorded within the
energy markets during February from short futures positions in
gasoline, heating oil, and crude oil futures as prices reversed
higher during February and March on increased concerns that
unexpected refinery shutdowns would curb fuel stockpiles in the
future.  In addition, prices were pressured higher on rising
geopolitical concerns in the Middle East after the United Nations
Security Council voted unanimously to increase sanctions against
Iran.  News that Iran had captured 15 members of the British
Royal Navy in the Persian Gulf added to investor worries about
                             - 25 -
<page> the stability of the world?s oil supply in the region,
thus weighing on prices.  Smaller losses in the energy markets
were experienced from short positions in natural gas futures as
prices moved higher during March after the U.S. Department of
Energy reported that natural gas supplies were down 15% from a
year ago.

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,
                            - 26 -
<page> 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 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 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.
- 27 -
<page> 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" 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.

- 28 -
<page> 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 Managers 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
constructing a distribution of hypothetical daily changes in the
value of a trading portfolio.  The VaR model takes into account
linear exposures to risk 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
                             - 29 -
<page> 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 Managers 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

- 30 -
<page> by primary market risk category at March 2008 and 2007.
At March 31, 2008 and 2007, the Partnership?s total capitalization
was approximately $20 million and $18 million, respectively.

Primary Market	            March 31, 2008        March 31, 2007
Risk Category	              Value at Risk         Value at Risk

Currency	(0.88)%	(1.61)%
Equity	(0.67)	    (1.11)
Interest Rate	               (0.34)	    (0.50)
Commodity                       	(1.08)	(0.61)
Aggregate Value at Risk         	(1.58)%	(2.04)%

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.
- 31 -
<page> 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, 2007, through March 31, 2008.

Primary Market Risk Category	   High		 Low		  Average
Currency	(1.62)%	(0.81)%	(1.15)%

Equity	(1.97)	(0.27)	(0.82)

Interest Rate	(1.48)	(0.34)	(0.77)

Commodity	(2.40)	(0.31)	(1.33)

Aggregate Value at Risk	(3.25)%	(1.58)%	(2.38)%



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;

- 32 -
<page>
*	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.
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, 2007, and for the four quarter-end
reporting periods from April 1, 2007, through March 31, 2008.  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.
- 33 -
<page> 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.; as of March 31, 2008, such
amount was equal to approximately 92% of the Partnership?s net
asset value.  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
                             - 34 -
<page> 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 Managers 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 March 31, 2008, by market sector.  It may be
anticipated, however, that these market exposures will vary
materially over time.

Currency.  The second largest market exposure of the Partnership
at March 31, 2008, was to the currency sector.  The Partnership?s
currency exposure is to exchange rate fluctuations, primarily
fluctuations which disrupt the historical pricing relationships
                              - 35 -
<page> 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-rate ? i.e., positions
between two currencies other than the U.S. dollar.  At March 31,
2008, the Partnership?s major exposures were to euro, Japanese
yen, Polish zloty, and Canadian dollar 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 minor currencies.  Demeter does not anticipate
that the risk associated with the Partnership?s currency trades
will change significantly in the future.

Equity.  At March 31, 2008, the Partnership had market exposure to
the global stock index sector, primarily to equity price risk in
the G-7 countries.  The G-7 countries consist of France, the U.S.,
Britain, Germany, Japan, Italy, and Canada.  The stock index
futures traded by the Partnership are by law limited to futures on
broadly-based indices.  At March 31, 2008, the Partnership?s
primary exposures were to the DAX (Germany), TOPIX (Japan), S&P
500 (U.S.), NASDAQ 100 (U.S.), Euro Stox 50 (Europe), NIKKEI 225
(Japan), and CAC 40 (France) stock indices.  The Partnership is
primarily 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
                            - 36 -
<page> difficult for the Partnership to avoid trendless price
movements, resulting in numerous small losses.

Interest Rate.  At March 31, 2008, the Partnership had market
exposure to the global interest rate sector.  This 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.  Demeter anticipates that
the G-7 countries? interest rates will remain the primary interest
rate exposures 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.

Commodity.
Energy.  The largest market exposure of the Partnership at
March 31, 2008, was to the energy sector.  The Partnership?s
primary energy exposure was to futures contracts in crude oil
                          - 37 -
<page> and its related products, as well as 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 price
resulting from weather patterns and supply and demand factors
and will likely continue in this choppy pattern.

Metals.	The third largest market exposure of the
Partnership at March 31, 2008, was to the metals sector.
The Partnership?s metals exposure was to fluctuations in the
price of precious metals, such as silver and gold, as well
as base metals, such as copper, aluminum and zinc.  Economic
forces, supply and demand inequalities, geopolitical factors
and market expectations influence price movements in these
markets.  The Trading Managers utilize their trading
system(s) to take positions when market opportunities
develop, and Demeter anticipates that the Trading Managers
will continue to do so.

Soft Commodities and Agriculturals.  At March 31, 2008, the
Partnership had market exposure to the markets that comprise
these sectors.  Most of the exposure was to the corn, live
                          - 38 -
<page> cattle, wheat, and cotton markets. Supply and demand
inequalities, severe weather disruptions, and market
expectations affect price movements in these markets.

Qualitative Disclosures Regarding Non-Trading Risk Exposure
The following was the only non-trading risk exposure of the
Partnership at March 31, 2008:

Foreign Currency Balances.  The Partnership?s primary foreign
currency balance at March 31, 2008, was in euros. 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 Managers, 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 Trading Managers, each of whose strategies
focus on different market sectors and trading approaches, in a
multi-manager Partnership, and by monitoring the performance of
the Trading Managers daily.  In addition, the Trading Managers
establish diversification guidelines, often set in terms of the

- 39 -


<page> 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 Managers.


Item 4.	CONTROLS AND PROCEDURES

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.

Changes in Internal Control Over Financial Reporting
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.


- 40 -
<page>
Item 4T.  CONTROLS AND PROCEDURES
Not applicable.






















- 41 -
<page> PART II.  OTHER INFORMATION

Item 1A. RISK FACTORS

Information regarding risk factors appears in Item 2.
?Management?s Discussion and Analysis of Financial Condition and
Results of Operations? and Item 3.  ?Quantitative and Qualitative
Disclosures about Market Risk? of this Form 10-Q.  There have been
no other material changes from the risk factors previously
referenced in the Partnership?s Report on Form 10-K for the fiscal
year ended December 31, 2007.

Item 5.  OTHER INFORMATION
Management.  Effective March 20, 2008, Mr. Michael Durbin, age
40, was named a Director of Demeter, subject to approval by the
National Futures Association.  Mr. Durbin is a Managing Director
of Morgan Stanley and has been Chief Operating Officer of
National Sales since February 2008.  Mr. Durbin joined Morgan
Stanley in 1990 and has served in a succession of leadership
positions in both its institutional and wealth management
businesses, most recently as head of Global Wealth Management
Group Capital Markets from October 2007 to February 2008.  Mr.
Durbin also served as Head of Equity Products and Services from
March 2006 to October 2007, Head of International Private Wealth
Management from May 2005 to March 2006, Chief Strategic and Risk
Officer of Global Wealth Management Group from September 2004 to

- 42 -
<page> May 2005, and Chief Administrative Officer of each of
Private Wealth Management and Global Wealth Management Group from
January 2002 to September 2004.  Mr. Durbin received his B.B.A.
from the University of Notre Dame in 1990 and an M.B.A. from the
New York University in 1998.

Effective March 20, 2008, Mr. Jose Morales, age 31, was named a
Director of Demeter, subject to approval by the National Futures
Association.  Mr. Morales is a Vice President at Morgan Stanley
and has headed the Product Development Group for the firm?s
Global Wealth Management business since August 2007.  Mr. Morales
joined the firm in September 1998 as an analyst in the investment
management division, and subsequently held positions in the
Morgan Stanley Investment Management Global Product Development
Group from May 2000 to December 2003, in the Global Wealth
Management Product Development Group from December 2003 to June
2006, and in Global Wealth Management Alternative Investments
Product Development & Management from June 2006 to August 2007.
Mr. Morales is a member of the Global Wealth Management New
Products Committee and the Consulting Services Due Diligence
Committee.  Prior to his appointment as a Director of Demeter,
Mr. Morales served as a member of the Managed Futures Investment
Management Committee from March 2005 to March of 2008.  Mr.
Morales received an M.B.A. with a concentration in Finance from
the NYU Stern School of Business in June 2007 and a B.S. in
                              - 43 -
<page> International Business Administration with a concentration
in Economics from Fordham University in 1998.

Effective April 1, 2008, Mr. Andrew Saperstein no longer serves
as a Director of Demeter.

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.















- 44 -

<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 Cornerstone Fund III L.P.
				         (Registrant)

                     By:   Demeter Management Corporation
                           (General Partner)

May 15, 2008         By:   /s/Christian Angstadt
                              Christian Angstadt
                              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.











- 45 -



- 6 -