Postfix relay to Office 365 external recipients not delivered

I have an issue with Postfix relay to MS Office 365. I can send to internal addresses, but not external. I receive the following error message:

550 5.7.1 Client does not have permissions to send as this sender (in reply to end of DATA command))

I have setup a Microsoft SMTP server and it works fine, both internal and external, but Postfix will not deliver to external addresses. I know it has to be a configuration issue. I just can't pinpoint what it is. I really would prefer to use Postfix. I've used it before and never had any issues, but if I don't figure this out, I will have to go with MS

Here is my main.cf:

# See /usr/share/postfix/main.cf.dist for a commented, more complete version


# Debian specific: Specifying a file name will cause the first
# line of that file to be used as the name. The Debian default
# is /etc/mailname.
myorigin = /etc/mailname

smtpd_banner = $myhostname ESMTP $mail_name (Ubuntu)
biff = no

# appending .domain is the MUA's job.
append_dot_mydomain = no

# Uncomment the next line to generate "delayed mail" warnings
#delay_warning_time = 4h

readme_directory = no

# TLS parameters
smtpd_tls_cert_file=/etc/ssl/certs/ssl-cert-snakeoil.pem
smtpd_tls_key_file=/etc/ssl/private/ssl-cert-snakeoil.key
smtpd_use_tls=yes
smtpd_tls_session_cache_database = btree:${data_directory}/smtpd_scache
smtp_tls_session_cache_database = btree:${data_directory}/smtp_scache

# See /usr/share/doc/postfix/TLS_README.gz in the postfix-doc package for
# information on enabling SSL in the smtp client.

myhostname = mailrelay.mydomain.com
mydomain=mydomain.com
relay_domains=*
alias_maps = hash:/etc/aliases
alias_database = hash:/etc/aliases
myorigin = /etc/mailname
mydestination = mailrelay.mydomain.com, localhost.mydomain.com, , localhost
relayhost = [pod51019.outlook.com]:587
mynetworks = 192.168.86.178, 127.0.0.0/8 [::ffff:127.0.0.0]/104 [::1]/128
mailbox_size_limit = 0
recipient_delimiter = +

inet_interfaces = all

smtp_sasl_auth_enable = yes
smtp_sasl_password_maps = hash:/etc/postfix/sasl_passwd
smtp_sasl_security_options = noanonymous
smtp_tls_CAfile = /etc/postfix/cacert.pem

smtp_generic_maps = hash:/etc/postfix/generic
smtp_sasl_mechanism_filter = login
smtp_tls_loglevel = 1
smtp_tls_security_level = may
smtp_send_dummy_mail_auth = yes