1:56pm: A source tells Michael Lee of the Washington Post that the Wizards have no intention of trading the No. 3 pick for Deng, so it appears these discussions are unlikely to get too far past the "exploratory" stage.
12:46pm: The Wizards and Bulls have engaged in "exploratory talks" about the possibility of a Luol Deng trade, according to ESPN.com's Marc Stein. Stein reports that if the discussions were to become more serious, the most likely construction for a deal would involve the Bulls receiving the No. 3 pick and Emeka Okafor, for salary-matching purposes.
Stein cautions that the talks may simply be a way for the Bulls to gauge the value of Deng, and adds that the Cavaliers are reported to have interest in the Chicago forward as well. According to Stein, more potential trade partners figure to surface if the Bulls convey they're seriously entertaining the idea of moving Deng.
In the hypothetical deal between the Wizards and Bulls proposed by Stein, the Bulls would add a little salary to the books for 2013/14 and beyond. Okafor ($14.49MM) will slightly out-earn Deng ($14.28MM) next season, and the starting salary for the No. 3 overall pick would likely exceed $4MM. Both Okafor and Deng are scheduled to come off the books in the summer of 2014, while the 2013 third overall pick would continue playing under a rookie-scale contract through 2017, if all his team options were exercised.
Various reports have indicated over the last few weeks that the Wizards are expected to choose between Otto Porter and Anthony Bennett, if they keep the No. 3 pick and both players are available. Porter projects to be the top small forward in the draft class, while Bennett could also play at the three if needed, but Deng would represent a more immediate and significant upgrade at the position.