UPDATE 1-Morgan 3rd qtr commods rev down before Sept. rally

UPDATE 1-Morgan 3rd qtr commods rev down before Sept. rally

NEW YORK, Sept 19 (Reuters) - Investment bank Morgan Stanley (MS.N: Quote, Profile, Research) said Wednesday earnings from commodities fell in the fiscal third quarter ended Aug. 31, before a bull run which began in natural resource markets this month.

Revenue from commodities trading fell 12 percent in the third quarter compared with the second quarter, although higher earnings from structured commodity products mitigated losses, Morgan Stanley's incoming chief financial officer, Colm Kelleher, told analysts on a conference call.

"Increased gain from structured deals, and strong results in the transactional and flow business, offset" some of the downside, Kelleher said.

Most commodity prices have rallied sharply since the start of September, with crude oil seeing record-high prices of above $82 a barrel and gold futures scaling 28-year peaks above $730 an ounce.

Morgan Stanley, the No. 2 U.S. investment bank by market value, said income from continuing operations fell to $1.47 billion, or $1.38 a share, in the quarter to Aug. 31, from $1.59 billion, or $1.50, a year earlier. Net revenue rose 13 percent to $8.0 billion from last year.