There appears to be some allelopathic properties of coffee grounds for some plants, mostly reported to be tomatoes and that family. There does not appear to be any adverse affect with other plants, such as lettuce, however.
How deep did you plant those wheat seeds?

I wonder if the reason for poor or no germination was because UCG tend to be hydrophobic when used as a mulch so it may have been lack of moisture that caused the failure. If you dig, or even scratch, the seeds into the top layer of soil there shouldn't be a problem if that's the reason.

I saved few links here: Allelopathic, autotoxic Chemicals in Coffee: - Test Forum - GardenWeb. There is much more out there about the subject.

Thanks for the feed back, I just sowed the winter wheat or rye, now iam not sure which one, right on top of the soil/coffee grounds, perhaps it had dried out enough to hinder germination, the other links are very interesting as well. I know a couple of years ago I sort of went wild with UCG's in some garden beds, and there was a lot of "Run Off" in the areas where they had totally had dried out.. I can get the UCG's so easily I guess I got a "little" over zealous with them! Thanks again!

Everything I have ever read about seeding wheat, or Rye, tells me the seed should be planted an inch to an inch and a half deep although I have often simply raked the Rye seed in so it was at least covered with soil. I have seen germination problems if those seeds are not covered.

In my baby palm tree seedling bed, I constantly add/sprinkle used coffee grounds around them and it seems they get eaten by worms or just decompose into the soil. The baby palms seem to really like them and have a deep green color to their fronds. Unless you put them on thick or till way too much of it into the soil for seed germination, they should only be a benefit to the plants and certainly the soil.

This post was edited by the_virginian on Tue, Sep 24, 13 at 22:26

I have often observed that in soils with inadequate levels of organic matter if some is put down the earthworms will move in and devour what is there, quickly. Areas of the lawn, that only get mulch mowed grass clippings during the growing season, that are covered fairly deeply with tree leaves that get mulch mowed will have a fairly thick brown covering for a week or two until the earthworms work them into the soil.
Coffee grounds, in my experience, tend to dry out quickly and do not make a good seed bed and where I have put them down thickly enough to be a mulch the worms do not digest them very quickly probably because the soil has adequate levels of organic matter already.

I have found that UCGs make a great soil amendment when tilling over a new area. I use them with other soil amendments like compost and leaf mould. In areas where we plant our tender tropicals in the late spring, tilled in UCGs in copious amounts really seems to help jumpstart plants like bananas and elephant ears.