A video encoder identifies one or more portions of a video picture that contain DC shift blocks and adjusts quantization (e.g., by selecting a smaller quantization step size) to reduce contouring artifacts when the picture is reconstructed. The encoder can identify the portion(s) of the picture that contain DC shift blocks by identifying one or more gradient slope regions in the picture and analyzing quantization effects on DC coefficients in the gradient slope region(s). The encoder can select a coarser quantization step size for a high-texture picture portion.