Hi MK,
You need to go thru these configurations/setup:
1- CORC: Search Procedure is enter for Order type and Plant combination (PP-PI)
2- Assign the Search Procedure in transaction COR4 or OPL8 (COR4 for PPPI ot OPL8 for PP)
3- Batch Determination condition is maintained in COB1: this will generate the automatic determination of the batches.
4- Take a look of the field Batch Entry in MM02 (MRP2). This was already done by you.
Of course all your batches need to have the corresponding classification and you should assign correctly the search procedure in COB1.
Try with the previous steps and come back if you still don't get the automatic batch determination.
Best Regards,
Mariano