For practical purposes there appears to be three causes:
(1) There is not enough insulin at night time to maintain control over blood glucose level in the early morning period.
(2) Dawn phenomenon:-the blood glucose level rise and insulin requirement increase between 3am and 7am.This increase in insulin requirement and hyperglycemia that follows is referred to as "Dawn" phenomenon.
It is known that many hormones undergo diurnal variations.These changes in hormonal level occurs both in diabetics and non diabetics.Soon after onset of sleep, there is surge of growth hormone,cortisol shows significant increase between 2am and 4am and reaches its peak value shortly after we wake up.Catcholamines gradually increase over night while glucagon remains relatively constant.These (growth hormone,Cortisol and Catcholamines ) all are potent insulin antagonists.The increased level of insulin antagonists seen during over night period could explain the reason for increased insulin requirement.Now,unless more insulin is produced in the body or is administered more glucose would be delivered into blood stream leading to early morning hyperglycemia.
(3) The Somogyi phenomenon:-I will not go into its detail.Suffice to say that more you increase the dose of insulin more you get morning hyperglycemia and ultimately diabetic coma.