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

# See /usr/share/postfix/ 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_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 =
alias_maps = hash:/etc/aliases
alias_database = hash:/etc/aliases
myorigin = /etc/mailname
mydestination =,, , localhost
relayhost = []:587
mynetworks =, [::ffff:]/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
Who is Participating?
I would guess that you had a username and password for the smarthost in the Microsoft SMTP relay.

Rather than relay through Office 365, why not just add your exit address to your SPF record and send direct ?
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