How do I crop a specific, oddly shaped image from Photoshop Elements 10?

I don’t know much about Photoshop. When I try to crop I can only do it in squares and the cookie cutters are odd shapes. I’m trying to crop an image with soft, circular edges, how do I do that?

Or is there a link to a tutorial to show me how to do this?
Thank you for the tips! I did the first one and pressed delete, but the stuff around the object isn’t being deleted. It remains highlighted. Any ideas?

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