To remove the ContextMenu you need to target the RadWatermarkTextBox. You can do that through the TextBoxStyle property of the RadAutoCompleteBox. You can create a custom style which targets RadWatermarkTextBox and set the ContextMenu property to a new ContextMenu with Visibility set to Collapsed.
I have created a sample project to better demonstrate what I have in mind. You can find it attached to this reply.
Regards,
Dinko
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