A basic function of the visual system is to estimate the location of objects. Among other sensory inputs, the coding of an object's position involves the integration of visual motion, such as that produced by other moving patterns in the scene. Psychophysical evidence has shown that motion signals can shift, in the direction of motion, both the perceived position and the directed action to a stationary object. The neural mechanisms that sustain this effect are generally assumed to be mediated by feedback circuits from the middle temporal area to the primary visual cortex. However, evidence from neural responses is lacking. We used measures of ERPs and Granger causality analysis—a tool to predict the causal connectivity of two brain responses—to unravel the circuit by which motion influences position coding. We found that the motion‐induced hand shift is tightly related to a neural delay: Participants with larger shifts of the pointing location presented slower sensory processing, in terms of longer peak latencies of the primary visual evoked potentials. We further identified early neural activity in the vicinity of the extrastriate cortex as the cause of this delay, which likely reflects the early processing of motion signals in position coding. These results suggest the rapid transfer of visual motion through feedforward circuits as a putative neural substrate in charge of the motion‐induced shift in reaching.