It is current dogma that neurons in primary visual cortex extracts local edges from the scene, from which later visual areas reconstruct more meaningful shapes. Recent neuroimaging studies, however, have shown V1 modulations by the degree of structure in the image (shape). These V1 modulations due to the level of shape coherence have been explained in one of two possible ways: due to changes in image statistics or shape-based perceptual influences from higher visual areas. Here we compare both hypotheses using stimuli composed of Gabor arrays constructed to form circular shapes that can be successively degraded by manipulating the orientations of individual Gabors while maintaining local and global statistics. In a first experiment we confirm that V1 responses are inversely correlated with the degree of structure in the image. In a second experiment, stimulus predictions are compared based upon the degree of circular shape or change in the image statistic varied (orientation variance) in the image. We find that these V1 modulations to shape change are correlated with low-level changes in orientation contrast rather than shape perception per se.