The Daily Mail says United primarily had their eye on Gremio playmaker Douglas Costa at the U20 South American tournament in Venezuela.
But Internacional striker Walter was more impressive, finishing the tournament as joint top scorer with five as Brazil won the competition.
The Brazilian club's president Vitorio Piffero said: "He was a big success in the Under 20 championship, but there has been no offer.
"Every now and then, people want to sound things out but this hasn't happened. And it's not our intention to sell him now."