Srihari,
STO is supposed to disappear from MD04 in the supplying plant if you create a delivery for the entire quantity of the STO requirement. The STO is replaced by the delivery. If you had both the delivery and the STO appear as requirements, you would in effect double the requirements.
From the little you have told me, I would say you haven't missed any configuration; this is pretty standard.
Can you elaborate on why you think this is a problem with net requirements?
Best Regards,
DB49