Would you want to hide this option for all users or just for a specific role?
In any case, find the appropriate role in Site administration > Users > Permissions > Define roles and edit the role you need changed.
Uncheck the following permissions to get that done (but keep track of what you unchecked):
gradereport/overview:view
gradereport/user:view
These are both by default set to allow for student roles, but if you want to hide the grade report (site or course), this is where you could do this.
