This guy is pretty easy. Once you have you 2 yellow chocobos go get a carob nut. There are 2 ways to get a carob nut. First steal it from red monsters around the chocobo sage's house. Or buy it at the Gold Saucer for 500 GP(Found in the Wonder Square). Breed the 2 with the carob nut and you could get a blue. 1/3 of a chance.