The grass needs to be on the same layer, set to force own texture, as your shadows, and the grass should be below the shadows in z-order.
Source atop will not render the source texture on top of transparent pixels. Note that by default layer 0 is not transparent and filled with white, so there are no transparent pixels. Thus a source atop image without any additional settings will always render on top of the background of layer 0.
Force own texture isolates that specific layer from others below it.