This is in the wrong forum, but Whatever.

1.) Are you on Black Mage when you try to hand it in? If you're not on the right class, it will be red. It will be gold on BLM even if the rod doesn't have the right Materia.
2.) It's not your only available BLM weapon is it? You can hand it in from armory chest, but you must have at least 1 other BLM weapon available to hand in another.
3.) Make sure that 2 of the Materia are bond to the weapon.