Addition to description of the problem.

The replication process overwrites values created by UPDATE statements with NULLS even during normal replication proces if database updates are done on stand-by server hw2....

Go to Control Panel->Administrative Tools and double click on Data Sources (ODBC). Select "Tracing" tab and click button "Stop Tracing Now". Once you disable tracing you can delete the tracing...

Thanks a lot Ken. The problem was with ODBC tracing that was filling up the sql.log file.

I could rephrase the question into something like: Is there a command or procedure that can reduce size of sql.log file? I was experimenting using backup database and log file...

When I execute backup, shrinkdb or shrinkfile database file and log file both reduce in size but the sql.log file is unaffected by these commands.