To draw an Ellipse the same procedure as you did for drawing a rectangle. So while drawing ellipse also you mark the two opposite end point of rectangle. To draw select 'Insert Menu > Ellipse' or you can also select icon the Entity toolbar. You can easily understand from following figure how to draw it.
As shown in above fig. P1 and P2 are the two opposite corner points of rectangle,
Select'Ellipse' tool from Insert menu or from Entity toolbar.
Mark 1st point (P1) as shown in above fig.
Then go for the 2nd point (P2).
The ellipse drawn having major axis equal to length and minor axis equal to width of rectangle which can be drawn through points P1 and P2.