You can listen to the Popup event, determine where the mouse was clicked and selectively make the menu items visible in the menu as follows:

private void contextMenu1_Popup( object sender, EventArgs e )
{
  // Get current mouse click position in the control
  // (assuming pictureBox1 is the control):
  Point ptClick = pictureBox1.PointToClient( Control.MousePosition );

  // Get the rectangle where you want to show the context menu.
  Rectangle preferredClickRect = new Rectangle( 0, 0, 50, 50 );
  if ( preferredClickRect.Contains( ptClick ) )
  {
    // Show all the menu items so that the menu will appear
    foreach ( MenuItem item in contextMenu1.MenuItems )
      item.Visible = true;
  }
  else
  {
    // Hide all the menu items so that the menu will not appear
    foreach ( MenuItem item in contextMenu1.MenuItems )
      item.Visible = false;
  }
}

Contributed from George Shepherd's Windows Forms FAQ