The main thing that is changing overnight is the amount of water in your system. It's amazing how much water weighs! A gallon of water weighs 8 pounds, and a pint of water (16 ounces) weighs 1 pound (in metric, 1 liter of water weighs 1 kilogram). This means that if you drink a 1-liter bottle of soda, you instantly gain 1 kilogram (2.2 pounds) from the water! That's a big weight change, and it can happen very quickly.
Overnight, there are two processes that cause you to lose water gradually. The first is respiration. Each time you exhale, you lose a little bit of water (exhale onto a cool piece of glass and you can see this moisture). The second is transpiration through the skin, also known as sweating. Over the course of a night, both of these processes eliminate quite a bit of water.
Then there is the tradition of using the restroom prior to the morning weigh-in. That process can eliminate up to 1 pound (0.5 kilograms) of water.
According to this water information page, the average person eliminates about 1.2 liters of water in urine each day, and also eliminates about 1 liter a day through perspiration and respiration. That's 2.2 kilograms (almost 5 pounds) of weight fluctuation happening throughout the day!